Moving Average Convergence/Divergence (MACD)

  • The MACD is the difference between a 26 day (7.5%) and a 12 day (15%) exponential MA

  • A 9 day (20%) exponential MA of the MACD called "the signal line" is plotted on top of the MACD to show buy/sell signals.

  • In sideways markets, buy when the MACD rises above its signal line, sell when the MACD falls below its signal line

 
MACD_example1.gif (7768 bytes)