MACD Trading Strategies

• MACD Fast Line & Signal Line
• MACD Buy & Sell Trade Signals
• MACD Whipsaws Fake Out Signals
• Generating Centerline Crossover Signals
• MACD Classic Bullish & Bearish Divergence
• MACD Hidden Bullish & Bearish Divergence
• MACD Summary

MACD Center Line Crossover

The MACD indicator is one of the most widely & commonly used technical indicators available. MACD technical indicator is a momentum oscillator with some indices trend following characteristics.

MACD indicator is one of the most popular indicators used in stock indices technical analysis. MACD indicator is used to generate stock indices signals using cross-overs.

MACD plots the divergence and convergence of moving averages. MACD indicator is constructed using moving average analysis. MA Convergence/Divergence is a trend-following indices technical indicator. MACD indicator shows the correlation between two moving averages.

One moving average is of a shorter period and the other for a longer period of stock indices trading price bars.

MACD Indicator - MACD Indicator Analysis

MACD indicator has a zero center line: values above zero line are bullish while those below zero are bearish.

In an upward indices trend the shorter MACD line rises faster that the longer MACD line this creates a gap. In addition as long as the MACD indicator is above the center mark the indices trend is still bullish as shown below.

Do not sell as long as the MACD Indicator is above the Center Mark - this is bullish territory and it does not matter how it is moving as long as it is above the zero center mark, as shown on the stock indices trading examples explained below.

MACD Indicator Above Zero Mark - Bullish Trading Signal

In a downward indices trend the shorter MACD line falls faster than the longer MACD line this creates a gap. In addition as long as the indicator is below the center mark the indices trend is still bearish as shown below.

Do not buy as long as the MACD Indicator is below the Center Mark - this is bearish territory and it does not matter how it is moving as long as it is below the zero center mark, as shown on the stock indices trading examples explained below.

MACD Indicator Below Zero Center Line Mark - Bearish Trading Signal

When the indices trend is about to reverse the MACD lines begin to move closer to each other, thus closing the gap.