MACD Crossover Signals
MACD center line crossovers generate trading signals using the center-line mark. The sentiment of the market can be confirmed using MACD centerline cross-overs. MACD forex crossover above the center line mark generates bullish market sentiment while cross-over below the center line generates bearish market sentiment.
- When the FastLine crosses below MACD Line (not center line) it shows market momentum is slowing - this isn't a reversal signal or a sell trading signal, wait out for the center line mark crossover.
- When the Fast line crosses above MACD Line (not center line) it shows the market momentum is slowing - this isn't a reversal setup or a buy trade signal, wait out for center line mark crossover.
- The Center Line cross-over signals will be the best signals for confirming buy & sell signals.
Using the chart on the illustration below, when MACD fast line crossed below the zero center mark, sell signal was confirmed & the market sentiment changed to bearish - downwards trend.
Also on the exemplification shown below when MACD fast line later crosses above zero center line mark, a buy trading signal was generated & the market sentiment changed to bullish - upward trend.
MACD Zero-Line Mark Crossover - Precisely When a Sell Signal & Buy Trade Signal are Generated
Oscillation of the MACD
MACD is an oscillator technical indicator that moves up & down around a zero center-line mark. The centerline is the neutral measurement, readings above zero mark will show bullish trend while values/readings below show bearish market trend.
MACD is also used to show over-bought and oversold levels. When the MACD reaches over-extended levels, then a currency is overbought or oversold. However, in a strong upward trending market prices will stay overbought in this case its better to buy.
Also in a strong downtrend market its better to sell, because prices will stay in the oversold region for a long time.
Overbought levels occur way above zero line while over-sold conditions/levels form way below zero mark.
MACD Overbought Region - Trend Continuation Signal
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