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