V.9:3 (104-104): Moving Average Convergence/Divergence (MACD) by Thom Hartle

V.9:3 (104-104): Moving Average Convergence/Divergence (MACD) by Thom Hartle
Item# \V09\C03\MACD.PDF
Availability: In Stock

Product Description

Moving Average Convergence/Divergence (MACD) by Thom Hartle

The moving average convergence/divergence (MACD) method was developed by Gerald Appel as a technique to signal trend changes and indicate trend direction. The procedure uses the difference between two exponentially smoothed price data, called the MACD line, and an exponentially smoothed series of this difference, which is called the signal line.

An exponential smoothing of price data has the advantage of responding quickly to price changes while smoothing data in a consistent manner. The calculation of a exponentially smoothed moving average (EMA) is simple. You start with the difference between today's closing price and yesterday's EMA. Multiply this difference by a constant, then add this value to yesterday's EMA. This is today's EMA value.

The constant is from the equation 2/(n+1) where n is selected to produce a constant that will approximate n days of a simple moving average. For example, if you want the EMA to simulate a nine-day moving average you would use n = 9, 2/(9+1) = 0.20 as the constant.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order