The bbmacd indicator for MetaTrader4 is the Bollinger Bands and Moving average convergence divergence (MACD) indicator bundled into one indicator window.
The Bollinger Band was developed by a renowned technical trader John Bollinger, while Gerald Appel is responsible for the Moving average convergence divergence (MACD) in the late seventies.
The Bollinger Band is a band drawn two standard deviations away from a simple moving average, while on the other hand the moving average convergence divergence (MACD) is a momentum indicator that measures the relationship between two moving averages of prices. Put the two indicators together and what you get is the bbmacd.
The bbmacd indicator comes preinstalled with a value of “66” for its trend period and this can be further tweaked by the trader for personal preferences. The workings of this indicator are quite valuable and easy for just about anyone to grasp.
The Bollinger Bands squeezes in towards the “0.00” level, an indication that volume is weaning and a breakout is imminent. The Moving average convergence divergence (MACD) will then offer us clues on price preferred direction.
Further down the line, the buy/sell signal are confirmed using the Moving average convergence divergence (MACD) patterns, as such a bullish signal is in place following the BB squeeze, when the blue histogram forms above the “0.00” level, while price is said to be bearish if the blue histogram of the bbmacd indicator, following contractions from the Bollinger Bands aligns below the “0.00” level.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (TrendPeriod), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: momentum, pattern