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 macd indicator (Moving Average Convergence Divergence).

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Posts : 22
Join date : 2011-04-13

PostSubject: macd indicator (Moving Average Convergence Divergence).   Mon Aug 08, 2011 1:21 pm

MACD is used firstly to spot changes in the strength, direction, momentum, and duration of a trend in a stock's price.

MACD was invented and implemented by Gerald Appel who found the difference between two averages and smoothed them out exponentially. It derives data by calculating the relationship between two exponential moving price averages and helps forecast market momentum on what's called a signal line. It is a mathematical indicator used by some financial traders to predict future price movements of currencies and other financial instruments. The MACD is referred to as a trend following indicator and it is a useful tool for confirming when trends have formed or may be reversing, whether it’s bullish or bearish. It does this by plotting the relationship between two MA‘s and it is what is known as a lagging indicator. But when the market is very volatile, trends could be ending before the MACD ...
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