One of the problems that a technical analyst always faces is the identification of the waves on the chart. In this respect, a whole host of indicators have been designed, such as zigzag indicator and so forth.
But one of the weak points of the zigzag indicator and other indicators similar to zigzag is that the input which is given to them is not accurate and standard. So, analysts have to change the inputs.
But the MACD waves indicator has fixed this problem, and it identifies major waves by the use of MACD indicator and it's default settings that it really puzzles you.
Since this indicator uses MACD Indicator to detect the waves, and this indicator is also one of the most reliable indicators, therefore, the waves that MACD waves identify are very accurate and standard, and as a result, you can safely analyze your chart based on these waves.
By accurately detecting the waves, this indicator helps you identify the harmonic and classical patterns plus Elliot waves on the chart easily and it lets you use them for your trades. To prove my statements, please kindly refer to the uploaded screenshots and it is also possible for you to test the indicator in the strategy tester.
Another feature which is added to this indicator is the display of price and time divergences. The price divergences are determined by MACD indicator and time divergences are determined by detected waves.
Note that the time divergence is determined by the amount of time correction and the price of the new wave compared to its previous wave, so at any moment the time correction of each wave compared to its previous wave considering the price correction will be lower or higher. So the indicator will always show you either negative or positive divergence.
Top tip: This indicator at any timeframe identifies major waves, so the indicated divergences are related to major waves.
In order to identify larger waves or smaller waves, I recommend using the default setting of the indicator in higher or lower timeframes.
- MACD Fast EMA - settings for MACD
- MACD Slow EMA - settings for MACD
- MACD SMA - settings for MACD
- MACD Apply to - settings for MACD
- Divergence - If this option is true, the indicator will show divergence
- Max and Min of MACD Main Value - If this option is true, the indicator will use the minimum and maximum value of MACD main indicator per wave to detect price divergences.
- Positive divergence color -the color of positive divergence
- Negative divergence color -the color of negative divergence
- Without divergence color -the color of not divergence