Trade with MACD Fast Line and MACD SignalLine

How to Analyze MACD Fast Line & MACD SignalLine Strategies

MACD indicator uses various methods to give technical analysis information.

1. MACD center line crossovers signal bullish or bearish price moves; below MACD zero center line is a bearish signal, above MACD zero center line is a bullish signal.
2. MACD Center-line Cross overs indicate a buy trade signal or a sell signal.
3. MACD Indicator Oscillations can be used by stock traders to signal oversold and over-bought levels
4. MACD indicator can also be used to look for divergence between price and MACD.

Construction of MACD Indicator

MACD indicator is constructed using two exponential MAs & this MACD indicator draws 2 lines. The two default exponential moving averages used are 12 & 26 EMA. Then a smoothing factor of 9 is also applied when drawing the MACD.

How MACD indicator is drawn - How to Interpret MACD Signals

MACD indicator uses 2 EMAs and a smoothing factor (12 EMA, 26 EMA & 9 smoothing periods)

MACD indicator only draws two lines - the MACD fast line and the MACD signal line

How Do I Read MACD Signals

• The MACD Fast-Line is the difference between the 26 EMA and 12 EMA
• The MACD Signal line is the 9 period moving average MA of MACD fastline.

Implementation of MACD Indicator

MACD indicator implements the MACD line as a continuous line while the MACD signal line is implemented as a histogram. These 2 MACD LINES are then used to generate signals using the MACD crossover trading strategy method.

There's also the MACD center-line which also is known as zero center mark and it's a neutral point between the buyers & the sellers which are trading the market.

MACD values/readings above the center line mark are considered as bullish signals while MACD values/readings below the center line mark are considered as bearish signals.

MACD indicator is an oscillator trading - MACD indicator oscillates above and below the centerline mark.

How Do I Read MACD Signals - How to Analyze MACD Indicator?

Study More Courses:

• EU 50 Strategy Tutorial
• Hammer Bullish Stock Index Candle Patterns
• How to Use Index TTF Trend Trigger Factor Technical Indicator
• Where Can You Find FTSE MIB 40 in MT5 Platform?
• Stock Index Average True Range Trading Indicator Technical Analysis
• What Happens in Stock Index after Bearish Engulfing Candle Patterns?
• How to Analyze a Indices Retracement on a Downwards Indices Trend
• Stock Indices Technical Indicators Used To Interpret Index Charts
• Stock Index Average True Range Trading Indicator Technical Analysis