Zero In On The MACD by Barbara Star, PhD
Do you find that you trade more than you’d like to while a market is trending? Here’s a variation on the moving average convergence/divergence you can use to keep you in trending markets longer so you can capture more of a trend.
Despite the advances in technical analysis, the moving average convergence/divergence (MACD) indicator created by Gerald Appel almost 40 years ago remains a mainstay in the trader’s toolbox. Its popularity is well-deserved since it serves more than one purpose. It functions as a momentum oscillator, a directional indicator, an indication of price vigor and, for some, a standalone trading system.
The MACD consists of two parts: the MACD line and the signal line. The standard MACD settings found in most charting software subtract the difference between the 12-period exponential moving average (EMA) and 26-period EMA to create the MACD line...