The TrendMaster_Forex_Indicator_V1.1.mq4 is a custom MetaTrader 4 (MT4) indicator designed for use in the forex market. This indicator is based on the MACD (Moving Average Convergence Divergence) and aims to detect bullish and bearish divergences between the price action and the MACD indicator, providing potential trade signals. Here's an explanation of how it works:

Key Features:

1. Divergence Detection:

   • Bullish Divergence: Occurs when the price forms a lower low, but the MACD forms a higher low, indicating potential upward price movement.
   • Bearish Divergence: Occurs when the price forms a higher high, but the MACD forms a lower high, suggesting potential downward movement.
   • The indicator identifies and marks these divergences on the chart with arrows. Green arrows represent bullish divergence, while red arrows represent bearish divergence.
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2. MACD and Signal Line Calculation:

   • The indicator calculates the MACD and its signal line using the user-defined settings: a fast EMA (Exponential Moving Average), a slow EMA, and a signal SMA (Simple Moving Average).
   • The MACD is the difference between the fast and slow EMAs, while the signal line is a moving average of the MACD.
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3. Price Trendlines:

   • The indicator can draw trendlines on both the price chart and the MACD chart to visualize the divergences.
   • These lines help to clearly show the relationship between price and MACD movements.
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4. Alerts:

   • The indicator includes an alert function, which will notify the trader when a divergence pattern is detected. The alert will be shown only when the price and MACD conditions for divergence are met, and it will trigger only once for each new divergence.
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5. Customization:

   • Fast EMA, Slow EMA, and Signal SMA settings are adjustable.
   • The user can choose whether to draw trendlines on the price and MACD charts.
   • The user can enable or disable alerts when a divergence pattern is found.
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How It Works:

• Initialization (init): The indicator is initialized, and its properties are set, including the display styles and buffers for storing values.
• De-initialization (deinit): When the indicator is removed, it cleans up any trendlines or graphical objects that were drawn.
• Calculation (start): For each new bar, the MACD values are calculated. The indicator then checks for bullish or bearish divergences by comparing the current price and MACD values with previous highs and lows.
• Divergence Logic:
  • Bullish Divergence: When the MACD forms a higher low while the price forms a lower low, the indicator identifies this as bullish divergence and marks it on the chart with a green arrow. It also draws trendlines if enabled.
  • Bearish Divergence: When the MACD forms a lower high while the price forms a higher high, the indicator identifies this as bearish divergence and marks it with a red arrow.
• Alerts: If enabled, the indicator triggers an alert with a message when a divergence pattern is detected.
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Application to a Trading Chart:

• Trading Signals: The arrows marking the bullish or bearish divergences can serve as potential entry signals. Traders often use such signals to identify reversals or continuation patterns in the market.
• Trendlines: The trendlines drawn by the indicator can help traders visualize the strength of the price and MACD movements, potentially aiding in identifying trend changes.
• Alerts: Alerts help traders stay informed without constantly monitoring the chart.

In summary, the TrendMaster_Forex_Indicator_V1.1 is a powerful tool for forex traders, helping them detect key divergence patterns using the MACD. This can enhance their ability to identify potential reversal points and make more informed trading decisions in the forex market.