MACD Strategy

• MACD Fast Line & Signal Line
• MACD Buy & Sell Signals
• MACD Whip-saws Fake-Out Signals
• Generating Center-Line Crossover Signals
• MACD Classic Bullish & Bearish Divergence
• MACD Hidden Bullish & Bearish Divergence
• MACD Summary

Bullish and Bearish Trading Signals

MACD indicator is one of the most widely & commonly and often used indicators available. MACD indicator is a momentum oscillator trading with some trend following characteristics.

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

MACD plots the divergence & convergence of moving averages(MAs). MACD indicator is constructed using Moving Average analysis. MA Convergence/Divergence is a trend-following trading indicator. MACD indicator illustrates the correlation between 2 moving averages.

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

MACD - MACD Technical Analysis

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

In an upwards trend the shorter MACD line rises faster than longer MACD line this creates and forms a gap. In addition as long as MACD indicator is above the center line the trend is still bullish like shown below.

Do not sell as long as the MACD is above the Center Line Mark - this is bullish territory & it does not matter how it's moving as long as it's above the zero center mark, such as shown on the example illustration shown & explained below.

MACD Above Zero Mark - Bullish Trading Signal

In a downwards trend the shorter MACD line falls faster than the longer MACD line this creates and forms a gap. In addition as long as the technical indicator is below the center line the trend is still bearish like shown below.

Do not buy as long as MACD is below the Center Line Mark - this is bearish territory & it does not matter how it's moving as long as it's below the zero center mark, such as shown on the example illustration shown & explained below.

MACD Below Zero Center-Line Mark - Bearish Signal

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

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