Author Topic: MACD -- Moving Average Convergence Divergence  (Read 3374 times)

0 Members and 1 Guest are viewing this topic.

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 19978
  • Thanks Received: 196
    • View Profile
MACD -- Moving Average Convergence Divergence
« Reply #-1 on: September 14, 2009, 06:17:14 PM »
A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.

There are three common methods used to interpret the MACD:

1. Crossovers - when the MACD falls below the signal line, it is a bearish signal, which indicates that it may be time to sell. Conversely, when the MACD rises above the signal line, the indicator gives a bullish signal, which suggests that the price of the asset is likely to experience upward momentum. Many traders wait for a confirmed cross above the signal line before entering into a position to avoid getting getting "faked out" or entering  into a position too early, as shown by the first arrow.

2. Divergence - When the security price diverges from the MACD. It signals the end of the current trend.

3. Dramatic rise - When the MACD rises dramatically - that is, the shorter moving average pulls away from the longer-term moving average - it is a signal that the security is overbought and will soon return to normal levels.

Traders also watch for a move above or below the zero line because this signals the position of the short-term average relative to the long-term average. When the MACD is above zero, the short-term average is above the long-term average, which signals upward momentum. The opposite is true when the MACD is below zero. the zero line often acts as an area of support and resistance for the indicator.
TOP PICKS
Engro fatima ogdc pol pso dgkc mlcf kapco npl ubl atrl nml efoods aicl hcar searl

Pakinvestorsguide

MACD -- Moving Average Convergence Divergence
« Reply #-1 on: September 14, 2009, 06:17:14 PM »

Offline Farzooq

  • Administrator
  • Senior Member
  • *****
  • Posts: 19978
  • Thanks Received: 196
    • View Profile
TOP PICKS
Engro fatima ogdc pol pso dgkc mlcf kapco npl ubl atrl nml efoods aicl hcar searl


Offline Admin

  • Administrator
  • Senior Member
  • *****
  • Posts: 3915
  • Thanks Received: 15
    • View Profile
Re: MACD -- Moving Average Convergence Divergence
« Reply #2 on: November 07, 2009, 11:35:12 AM »

MACD is above zero signals upward momentum bullish trend. The opposite is true when the MACD is below zero

Offline Admin

  • Administrator
  • Senior Member
  • *****
  • Posts: 3915
  • Thanks Received: 15
    • View Profile
Re: MACD -- Moving Average Convergence Divergence
« Reply #3 on: November 07, 2009, 11:57:21 AM »

MACD is above zero signals upward momentum bullish trend. The opposite is true when the MACD is below zero


Offline Admin

  • Administrator
  • Senior Member
  • *****
  • Posts: 3915
  • Thanks Received: 15
    • View Profile
Re: MACD -- Moving Average Convergence Divergence
« Reply #4 on: December 27, 2009, 02:55:33 PM »
Different sets of macd combinations

6,19
12,26
19,39

SC

  • Guest
Re: MACD -- Moving Average Convergence Divergence
« Reply #5 on: February 08, 2010, 12:49:39 PM »
Different sets of macd combinations

6,19
12,26
19,39

Recently, came across a newborn on another forum extolling the benefits of Elliot Wave Oscillator (EWO) over the MACD.  :lol4:
I wonder what he/she will say if someone told him that EWO IS an MACD  :msn_grin:.

Offline Learner7

  • Senior Member
  • *****
  • Posts: 1147
  • Thanks Received: 5
    • View Profile
Re: MACD -- Moving Average Convergence Divergence
« Reply #6 on: February 08, 2010, 11:17:45 PM »
Different sets of macd combinations

6,19
12,26
19,39

Recently, came across a newborn on another forum extolling the benefits of Elliot Wave Oscillator (EWO) over the MACD.  :lol4:
I wonder what he/she will say if someone told him that EWO IS an MACD  :msn_grin:.

Elloitte is not an oscillator in fact it is a theory known as Elloitt Wave Theory
it works on patterns known as 5 - 3 pattern.

It is usually implemented with a tool that has histogram, hence the tool either be MACD or OsMA.

SC

  • Guest
Re: MACD -- Moving Average Convergence Divergence
« Reply #7 on: February 09, 2010, 01:11:54 AM »
Thank you for the kind information.  :salute:

But I was talking about Elliot Wave Oscillator (EWO), which is a variation of the MACD.

Did you not even suspect that I may know these two are different - EW (Elliot Wave) and EWO, that is  :msn_grin:.

Note: Some people sometimes use Elliot Wave Oscillator to count waves, too.
http://www.tradingfives.com/articles/elliott_oscillator.htm


« Last Edit: February 09, 2010, 10:05:36 AM by SC »

Offline Ahmedkhan

  • Junior Member
  • **
  • Posts: 117
  • Thanks Received: 0
    • View Profile
Re: MACD -- Moving Average Convergence Divergence
« Reply #8 on: November 03, 2015, 10:30:12 AM »
Maine boht se indicators try keya hain magar mere khayal se Moving Average sab se behtareen ha kiu k ya boht hi asan ha aur kafi zada affect bhe ha m agar hume ya make sure karna hoga k hum money management achi tara se kare take koi risk na ho aur mere lia sab kuch boht asan ha khas tor pay 50% bonus jo milta ha OctaFX broker se ya boht hi behtreen ha aur easy kardeta ha money management.

Tags: