Post by account_disabled on Mar 9, 2024 3:15:06 GMT -5
Today we will look at one of the most popular indicators: MACD. This tool is easy to use and is often part of successful trading systems. Today I will explain how MACD works, how it is calculated and interpreted and what kind of signals it gives. You will also learn how to set up and use the MACD indicator. You will see examples of real trading in the Forex market, stocks and metals. In this article we will analyze: What is the MACD indicator: definition and history MACD indicator: formula and calculation How to use MACD: theory and signals MACD Trading Strategies in Forex Using MACD indicators in real trading: examples Best MACD Setup Best MACD indicator for MT4 and MT5 Screener MACD MACD vs. other indicators MACD Usage Limitations MACD Indicator FAQ Conclusions from MACD use What is the MACD indicator.
Definition and history MACD is the acronym in English Mexico Mobile Number List for Moving Average Convergence Divergence or, translated into Spanish, Moving Average Convergence Divergence (hereinafter MM). Its name is actually a complete description of the MACD indicator. Shows the degree of divergence of the MMs from each other. Two EMAs are used to calculate MACD: fast and slow. Subsequently, the long MA is subtracted from the short and then the difference is flattened using a simple moving average. As a result, traders only see two curves: MACD and the signal line. The difference between them serves as the basis for trading signals. The MACD indicator was created by American analyst Gerald Appel in 1979. Appel originally planned to use it to analyze the stock market.
But, as is often the case with useful indicators, it was later used in other markets, including Forex. The MACD indicator is universal in its application. It shows a wide variety of signals: crossover, overbought and oversold zones, position changes with respect to the zero line, as well as divergence and convergence signals. The tool works well with almost all exchange instruments. The only limitation is the timeframe. It is not recommended to set it below H1, as the MACD indicator readings will be affected by price noises - the natural volatility of the market. MACD indicator: formula and calculation The MACD line of the indicator is a graphical result of calculating the difference between the fast and slow EMA. In the initial version, it was displayed as a curve. The modern version of the indicator shows it as a curve and the difference between the lines as a diagram.