Critical MACD Levels by Kevin Luo
The MACD is a popular trend-following indicator from which you can develop simple trading rules. Here are the results of some in-depth research that reveals some interesting points that will help you effectively apply the indicator.
Trend-followers are well acquainted with the moving average convergence/divergence (MACD) indicator—the one originally developed by Gerald Appel in 1977. It’s great for identifying trends, but occasionally, especially during extended downtrends and choppy price action, it may not be an effective tool for trend identification. However, the indicator is too valuable to abandon. Is there a way to optimize the indicator to improve its overall effectiveness?