Moving Average Convergence / Divergence
Liens connexes:
Acceleration / Deceleration Oscillator | Moving Average Convergence / Divergence |
MACD - Moving Averages Convergence/Divergence
MACD shows the two moving averages of price correlation and follows the tendency. This technical indicator is based on the difference between 12- and 26-period exponential moving averages. For a clearer definition of the buying/selling moment the signal line equal to 9-period moving average is plotted. It is recommended to use MACD in wide-swinging trading markets.MACD signals:
- Crossovers: When the MACD falls below its signal line it is recommended to sell. If it rises above - the buying signal occur. It is also popular to buy/sell when the MACD goes above/below the nought line.
- Overbought/oversold conditions: When the shorter moving average pulls away dramatically from the longer moving average, it is likely that the security price is overextending and will soon return to more realistic levels.
- Divergences: the signal is based on divergences between price and MACD, which as a rule leads to the tendency change.
A bearish divergence occurs when the MACD is making new lows while prices fail to reach new lows.
Both of these divergences are most significant when they occur at relatively overbought/oversold levels.
Calculation:
The MACD is calculated by subtracting the value of an exponential moving average from a 12-period exponential moving average. A 9-period dotted simple moving average of the MACD (the signal line) is then plotted on top of the MACD.MACD = EMA(CLOSE, 12)-EMA(CLOSE, 26) SIGNAL = SMA(MACD, 9)
Where:
EMA - Exponential Moving Average
SMA - Simple Moving Average
SIGNAL - signal line of the indicator.
Similar information about indicators you can find in information system of trade platform MetaTrader 4 (Help-> Help Topics [F1] -> Ananlitics -> Technical Indicators).
