Description

What does the MACD Divergence Indicator Do?

This indicator scans the MACD histogram and signal line to identify both classic and reverse divergence. When a potential reversal forms, it draws green lines for bullish divergence and red lines for bearish divergence. Classic divergence is displayed with solid lines, while reverse divergence is shown with dotted lines for easy visual separation.

How does the MACD Divergence Indicator Help Traders?

It helps traders catch early trend reversals, momentum shifts, and weakening market conditions. Instead of manually checking for divergence, the indicator automates the entire detection process and gives clear buy/sell arrows to support decision-making. It offers fast and accurate detection thanks to a complete code rewrite for MT5.

Why is MACD Divergence Indicator More Reliable?

This MT5 version is rewritten from the original MQL4 code to improve speed, fix bugs, and optimize performance. It delivers more accurate divergence plotting, faster alerts, and a cleaner structure that works well on all timeframes and forex pairs. It is based on the open-source concept from the original indicator but re-engineered for stability.

This indicator focuses on comparing price swings with MACD swings to highlight when the market trend is losing strength. It visualizes hidden and regular divergence early, giving traders enough time to prepare for potential reversals. All drawing is done automatically without manual analysis.

Traders use the tool to confirm entries, detect exhaustion patterns, and add confluence to their technical strategy. The alerts notify the trader immediately when divergence forms, allowing for quick reactions in both breakout and reversal setups.

Advantages 

• Detects divergence automatically in real time.

• Helps identify early reversal and momentum changes.

• Reduces manual chart analysis time.

• Plots clean divergence lines directly on the MACD window.

• Uses solid and dotted lines to separate classic and reverse divergence.

• Gives clear buy and sell signals with arrows.

• Supports all MT5 timeframes and trading instruments.

• Includes pop-up, sound, and push notification alerts.

• Works well with any existing trading strategy.

• Helps improve entry accuracy and timing.

Features 

• Automatic detection of bullish and bearish MACD divergence.

• Solid-line drawing for classic divergence.

• Dotted-line drawing for reverse divergence.

• Green arrow for buy signals.

• Red arrow for sell signals.

• Customizable alert options (push, sound, pop-up).

• Full MT5 compatibility.

• Optimized code base for improved performance.

• Lightweight and fast calculation.

• Supports MACD histogram and signal line analysis.

How to Trade

The MACD Divergence Indicator for MT5 can be implemented as a trend reversal strategy. Traders should monitor the green and red arrows for bullish and bearish divergences and confirm entries when the price aligns with the divergence signal. Use the solid and dotted lines to distinguish classic and reverse divergences and focus on higher timeframes for stronger signals. Position sizing and stop-loss placement should follow standard risk management to limit losses during false signals. Alerts can be used to catch setups without constantly monitoring the charts.

Once a divergence forms, traders can plan entries near swing lows for bullish signals and swing highs for bearish signals. Combine the indicator with trend or support/resistance analysis to improve accuracy. Exits can be set at previous structure points or based on momentum fading. The tool works across all MT5 instruments and timeframes, allowing for flexible multi-market application. Regularly review signals and adjust parameters to match volatility and trading style.

Formula

MACD Line = EMA(12) – EMA(26)

Signal Line = EMA(9) of MACD Line

Histogram = MACD Line – Signal Line

Conclusion

The MACD Divergence Indicator for MT5 is a simple and effective tool for spotting early trend reversals using MACD price behavior. It shows divergence clearly with line colors, line styles, and arrow signals. Traders can use it to confirm market direction, improve accuracy, and get automated alerts without scanning charts manually. It is fast, reliable, and designed for easy use on any market or timeframe.

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