MACD Indicator Crossover Trading Signals
MACD Center line crossovers generate Forex trading signals using the center line mark. The sentiment of the forex market can be confirmed using the MACD center line crossovers. MACD forex crossover above the center line mark generates bullish forex market sentiment while crossover below the center line generates bearish forex market sentiment.
- When the Fast line crosses below the MACD Line (not center mark) it shows forex market momentum is slowing - this is not a reversal forex signal or a sell forex signal, wait for center mark crossover.
- When the Fast line crosses above the MACD Line (not center mark) it shows the forex market momentum is slowing - this is not a reversal forex trading signal or a buy forex trading signal, wait for center mark crossover.
- The Center-Line crossover forex signals will be the best trading signals for confirming buy and sell forex signals.
Using the Forex chart in the example below, when MACD fast line crossed below the zero center mark, the sell forex trading signal was confirmed and the forex market sentiment changed to bearish - downwards forex trend.
Also in the example below when MACD fast line later crosses above zero center mark, a buy forex trading signal was generated and the market sentiment changed to bullish - upwards forex trend.
MACD Zero-Line Mark Crossover - Precisely When a Sell Forex Signal and Buy Forex Signal are Generated
Oscillation of the MACD Indicator
The MACD Forex indicator is an oscillator indicator that moves up and down around a zero center line mark. The center-line is the neutral measurement, values above zero will indicate bullish forex market trend while values below indicate bearish forex market trend.
The MACD indicator is also used to indicate overbought and oversold levels. When the MACD reaches overextended levels, then a currency is overbought or oversold. However, in a strong upward trending forex market prices will stay overbought in this case its better to buy.
Also in a strong down trending forex market its better to sell, because prices will stay in the oversold region for a long time.
Overbought conditions occur above the zero line while oversold conditions occur way below the zero mark.
MACD Overbought Region - Forex Trend Continuation Signal