AIT Training Trading Academy Omni Trader Systems Market News Forex News  IPO News
Mutual Funds  Investment Systems Futures Trading Best Day Trading Stocksystem  Forex  Trading

Stock Quotes

Stock Charts

Trading  Information

Investment Books

Safe Money Report

Investment Training

Wave59 Software

Mutual Fund Traders

ArbTrac Investments

Swing Trading

Get Folio Investments

Dow Investments

Candlestick Shop

Expert Stock Picks!

Winning Stocks

Trading Solutions 

Day Traders Chat

Stochastics

Relative Strength Index

Commodity Channel Index

Bollinger Bands

MACD

Herrick Payoff Index

Volume

ADX

Sierra Charts

Head and Shoulders

Symmetrical Triangles

Flags and Pennants

Wedges

Channel Formation

Cup and Handle

Double/Triple Tops

 

Other Services

Sierra Charts

Futures Symbols 

 


INVESTOR INFO



Overview

The MACD ("Moving Average Convergence/Divergence") is a trend following momentum indicator that shows the relationship between two moving averages of prices. The MACD was developed by Gerald Appel,

The MACD is the difference between a 26-day and 12-day exponential moving average. A 9-day exponential moving average, called the "signal" (or "trigger") line is plotted on top of the MACD to show buy/sell opportunities. (Appel specifies moving averages as percentages. Thus, he refers to these three moving averages as 7.5%, 15%, and 20% respectively.)

Interpretation

The MACD proves most effective in wide-swinging trading markets. There are three popular ways to use the MACD: crossovers, overbought/oversold conditions, and divergences.

Crossovers

The basic MACD trading rule is to sell when the MACD falls below its signal line. Similarly, a buy signal occurs when the MACD rises above its signal line. It is also popular to buy/sell when the MACD goes above/below zero.

Overbought/Oversold Conditions

The MACD is also useful as an overbought/oversold indicator. When the shorter moving average pulls away dramatically from the longer moving average (i.e., the MACD rises), it is likely that the security price is overextending and will soon return to more realistic levels. MACD overbought and oversold conditions exist vary from security to security.

Divergences

A indication that an end to the current trend may be near occurs when the MACD diverges from the security. A bearish divergence occurs when the MACD is making new lows while prices fail to reach new lows. A bullish divergence occurs when the MACD is making new highs while prices fail to reach new highs. Both of these divergences are most significant when they occur at relatively overbought/oversold levels.


 

Gemstones Jewelry

StoSFlowers

StoSgifts

StoSCandles

Cedar

StoSOutdoors

 StoSNotebook

StoSWealth