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Learn Trading Online How to Trade MACD

Learn Trading Online How to Trade MACD

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Published by AsiaPacFinance.com
MACD - One of the most widely used indicators
MACD - One of the most widely used indicators

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Published by: AsiaPacFinance.com on Jan 25, 2012
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01/25/2012

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Learn Trading Online: How to Trade MACD |AsiaPacFinance.com – Online TradingCourses Stocks and Forex Trading VideosMembership
http://www.asiapacfinance.com/blog/2012/01/25/learn-trading-online-how-to-trade-macd/January 25, 2012Watch Stocks and Forex Trading Videos HereThe moving average convergence divergence (MACD), shows 2 lines.The faster (blue) line, called the MACD line, is the difference, between 2 exponentiallysmoothed moving averages of closing pricesThe slower (red) line, called the signal line, is usually a 9 period exponentially smoothedaverage of the MACD line.The default values are 12, 26 and 9 A crossing by the faster MACD line below/above the slower signal line is a sell/buy signal.This is indicated by the vertical blue line periods in the S&P 500 chart below.
 
 An overbought/oversold condition is present when the lines are too far above/below the zeroline. See rectangular boxes below.
 
Crossing above, and below, the zero line, is another way, to generate buy and sell signals.Divergences appear between the trend of the MACD lines, and the price lines. A negative, or bearish divergence (see blue arrows below), exists when the MACD lines, are wellabove the zero line and start to weaken, while prices continue to trend higher. This is often, awarning of a market top. A positive, or bullish divergence, exists when the MACD lines, are well below the zero line, and startto move up ahead, of the price line. This is often, an early sign of a market bottom.

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