MACD Trading Strategies
- MACD Fast Line & Signal-line
- MACD Buy and Sell Trading Signals
- MACD Whip-saws Fake Out Signals
- Generating Center Line Cross-over Signals
- MACD Classic Bullish & Bearish Divergence Setup
- MACD Hidden Bullish & Bearish Divergence
- MACD Summary
MACD Centerline Cross-over
The MACD indicator is one of the most widely & often used technical indicators available. MACD indicator is a momentum oscillator trading with some trend following characteristic tendencies.
MACD indicator is one of the most popular/liked indicators used in stock technical analysis. MACD indicator is used to generate stock signals using cross overs.
MACD plots the divergence and convergence of moving averages. MACD indicator is constructed using Moving Average analysis. Moving Average Convergence/Divergence is a trend following technical indicator. MACD indicator shows the correlation between 2 MAs.
One moving average is of a shorter period and the other for a longer period of stock price bars.
MACD Indicator - MACD Indicator Analysis
MACD indicator has got a zero center line: values above zero mark are bullish while those below the zero are bearish.
In an upwards trend the shorter MACD line rises faster than the longer MACD line this creates a gap. In addition as long as the MACD indicator is above the center line mark the trend is still bullish as shown below.
Do not sell as long as MACD Indicator is above the Center Line - this is bullish territory & it doesn't matter how it is moving as long as it is above zero center line, as shown on the illustrations presented below.
MACD Indicator Above Zero Mark - Bullish Signal
In a downwards trend the shorter MACD line falls faster than the longer MACD line this then creates a gap. In addition as long as the indicator is below the center line mark the trend is still bearish as illustrated below.
Do not buy as long as the MACD Indicator is below the Center Line - this is bearish territory & it doesn't matter how it is moving as long as it is below the zero center line, as shown on the illustrations illustrated below.
MACD Indicator Below Zero Center Line Mark - Bearish Trading Signal
When the trend is about to turn & reverse the MACD lines start to move closer to each other, thus closing the gap.
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