Simple Trading with Moving Average Convergence Divergence

MACD stands for Moving Average Convergence Divergence, which is a technical analysis indicator created by Gerald Appel in the 1960s. MACD is an indicator that gives buy signal excess or excess selling by looking at the relationship between the MA (moving average=the average movement) long and short term. The MACD line is the difference of 2 MA above. The second line is a line is a sign of the short-term MA MACD line .

MACD shows the difference between the exponential moving average (exponential moving average which is commonly abbreviated as "EMA") is a fast and slow closing price. Some development has been done on the MACD for years but it still leaves the problem slowness on the indicator, so often criticized for its failure in response to weak market conditions or turbulent. MACD is an indicator of a trend follower is designed to identify trend changes in price and should not be used in volatile market conditions.

Crossing signal is a common trade rules where this is a buy signal when the MACD crossed above signal line break or a sell signal when the MACD crosses down. These crossings can often happen that more research must be done to ensure the buy and sell signals. Histogram showing the event of crossing , when the MACD line crosses through zero on the histogram, it can be said that the MACD signal line has been penetrated.

The histogram can also help reflection when two lines come together. Both may still arise but coming together, so that the histogram that falls can be a sign that the crossing could be approached. Positive difference between the MACD and price arises when price forms a new low sale price, but the MACD does not establish a new low point. This may mean that the market tends to rise (bullish) where symptoms decrease was approaching. Negative difference is similar, where the price went up, but the MACD does not rise as high as ever then this means that the market is falling (bearish).

Recommended for use MACD on the weekly scale before seen in the daily scale in order to avoid resorting to short-term trading to the direction of the intermediate jangaka symptoms.

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Disclaimer: Please be more concern if you invest in online forex trading, because in the blink of an investment you can not give any results, understand the risk of any transaction that you run. We here analyzed according to our ability and we are not to blame if the prediction or analysis that we submit inappropriate and contrary to the market that makes you suffer losses.

Ditulis oleh William Perkasa pada tanggal Oct 23, 2013