Prisma Pan indicator – MACD modification
Prisma Pan is one of many modifications of the popular technical analysis tool, which is MACD. It is effective on the market trend movement. Prisma Pan monitors the difference between the dynamics of the currency pair price and the indicator readings. In other words, the indicator that we are considering today allows us to determine the divergence. It is a signal of a possible change in the direction of price movement. And this is the best time to open a trading position.
Settings and parameters
This indicator should be downloaded (link at the end of the article) and installed in MT4. It’s not hard to do that. However, if you have any difficulties, I recommend you to use my instruction. It can be found in the article “Cheat sheet on Metatrader 4”.
Prisma Pan has only three parameters.
With the help of the base parameter we specify the number of candlesticks that the indicator will use to perform its calculations.
The indicator has a red signal line. Its period is defined by Signal_SMA_Period.
Well, the third parameter is called Multiplikator. It allows you to set the value of the histogram shift relative to the price. This variable affects the extent to which the indicator is delayed or outperformed. You can experiment with this parameter to get the best result.
Prisma Pan in trading
Trade decisions can be made immediately after the histogram crosses the zero level. If its columns move from the bottom zone to the top zone, you can consider shopping. And if it’s the other way around, sales.
This is an example of a signal to open a BUY:
In addition, you can trade when you see a divergence on the chart. If the price rises, forming the next local maximum, and the indicator peaks began to fall, then there is a high probability that the price movement will change from upward to downward.
If the price goes down, forming another local low, and the indicator peaks start to rise, we can expect the price movement to change from downward to upward.
I want to warn you that you should use this indicator carefully and not trust its signals completely. As I wrote above, it works well during the trend. If the market observes the flat, you can get a lot of losing trades. To prevent this from happening, it is better not to use Prisma Pan during this market period. It is intended for use only as an additional tool for market analysis. And of course, his work needs to be tested on a demo account.
Download Prisma Pan: