MACD Center Line Crossover - Bullish & Bearish Trade Signals

The MACD is one of the most commonly used indicators out there. MACD is an oscillator that measures momentum and follows trends a bit.

MACD stands out as one of the most widely utilized indicators in technical chart reading. Crossover events generate signals using the MACD.

MACD spots where moving averages diverge or converge. It uses moving average math. This trend tool follows price moves. It links two averages together.

One moving average is of a shorter period & the other for a longer period of the price bars.

MACD - MACD Analysis

MACD features a zero center line: readings above indicate bullish conditions while those below indicate bearish conditions.

In an upward market trend the shorter MACD line rises faster than the longer MACD line this forms a gap. Additionally as long as the MACD technical indicator is above the center mark the trend is still bullish as is shown below.

Refrain from initiating a sell order while the MACD resides above the Center Line: this segment signifies bullish territory, and its status above the zero centerline dictates that selling is inappropriate, irrespective of its movement within that range, as depicted in the visual aid presented henceforth.

MACD Above Zero Mark - Bullish Trade Signal

In a downward trend the shorter MACD line falls faster than the longer MACD line this forms a gap. Additionally as long as the indicator is below the center mark the market trend is still bearish as is illustrated and shown below.

Avoid buys if MACD stays below the center line. That's bearish area. Direction doesn't matter below zero, as shown below.

MACD Below Zero Center-line Mark - Bearish Trade Signal

When the market trend is poised for a shift or reversal, the MACD lines will begin to converge, thereby reducing the separation between them.

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MACD Center Line Crossover - Bullish & Bearish Trade Signals