MACD Trading Strategies
- MACD Fast Line and Signal Line
- MACD Buy & Sell Signals
- MACD Whip-saws Fake Out Signals
- Generating Centerline Crossover Signals
- MACD Classic Bullish and Bearish Divergence
- MACD Hidden Bullish and Bearish Divergence Setup
- MACD Summary
MACD Center Line Crossover - Bullish and Bearish Signals
MACD indicator is one of the most widely & commonly used indicators available. MACD technical indicator is a momentum oscillator trading with some trend following characteristics.
MACD technical indicator is one of the most popular indicators used in technical analysis. MACD indicator is used to generate forex signals using cross-overs.
MACD draws the divergence and convergence of moving averages. MACD indicator is constructed using moving average analysis. Moving Average Convergence/Divergence is a trend-following trading indicator. MACD indicator shows the correlation between 2 MAs.
One moving average is of a shorter period and the other for a longer period of price bars.
MACD Indicator - MACD Indicator Analysis
MACD indicator has a zero centerline: values above zero line are bullish while those below the zero are bearish.
In an upward trend the shorter MACD line rises faster that the longer MACD line this creates a gap. In addition as long as MACD indicator is above the center mark the market trend is still bullish as shown below.
Do not sell as long as MACD Indicator is above the Center Mark - this is bullish territory & it does not matter how it's moving as long as it is above the zero center mark, as shown on example below.
MACD Indicator Above Zero Mark - Bullish Signal
In a downwards forex trend the shorter MACD line falls faster than the longer MACD line this creates a gap. In addition as long as the indicator is below the center mark the market trend is still bearish as illustrated below.
Do not buy as long as the MACD Indicator is below the Center Mark - this is bearish territory and it doesn't matter how it is moving as long as it's below the zero center mark, as shown on example below.
MACD Indicator Below Zero Center Line Mark - Bearish Signal
When the forex trend is about to reverse the MACD lines start to move closer to each other, thus closing the gap.
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