Trade Stock Indices

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MACD Technical Analysis Buy and Sell Indices Trading Signals

Since the MACD stock indices indicator uses 26 and 12 EMA to plot, we shall compare these two EMAs with the MACD indicator to determine how these buy and sell stock indices signals are generated.

MACD Indices Technical Indicator

MACD Stock Indexes Indicator - Example of MACD Indices Indicator



The MACD indices indicator is a leading indicator meaning it generates indices trading signals that are leading compared to stock indexes price action as opposed to lagging indicators that lag behind the stock indexes price.


Buy Indices Trade

A buy indices trade is generated when there is a MACD fast line crosses above the signal line. However, as with any leading indicator these stock indices signals are prone to whipsaws/ fake outs.


To eliminate the whipsaws it's good to wait for confirmation of the buy or sell stock indexes trading signals. The confirmation stock indices signal is when the two lines cross above the zero mark, when this happens the buy generated is a reliable indices signal.


In the stock indexes trading example explained and illustrated below, the Moving average stock indices indicator generated a buy indices trading signal, before stock indexes price started to move up. But it wasn't until the MACD moved above the zero line that the buy stock indices signal was confirmed, and the Moving Averages also gave a crossover indices signal. From experience it's always good to buy after both the MACD lines move above zero center line mark.

Where to Buy using MACD Indices Technical Indicator

Where to Buy using MACD Stock Indexes Indicator - Buy Indices Trading Signal



Sell Indices Trade

A sell stock indices signal is generated when there is a MACD fast line crosses below the signal line. However, just like the buy indices trading signal, these are also prone to whipsaws/ fake outs.


To eliminate the whipsaws it's good to wait for confirmation of the sell indices signal. The confirmation is when the two lines cross below the zero mark, when this happens the sell generated is a reliable indices signal.


In the stock indexes trading example explained and illustrated below, the Moving average generated a sell confirmed after MACD moved below the zero line at the same time that the Moving Averages gave a crossover indices signal.

Where to Sell using MACD Indices Technical Indicator

Where to Sell using MACD Stock Indexes Indicator - Sell Indices Trading Signal

 

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