What is a gliding average convergence divergence?

Sliding average divergence convergence (MACD) was designed by merchant Gerald Appel. It is a technical commercial tool that shows a link between two movable asset prices, such as commodity futures or stocks. MACD is often referred to as a trend after the indicator. Traders use it primarily to detect changes in the latest trend. This technical trading tool is usually not used by traders on markets that are fixed in the business range. A more accurate interpretation of gliding average divergence convergence is that both rows represent a moving average, which is the difference between the two moving diameters. A signal line is carried on the upper part of the MacD. It is used as a means to determine when to buy or sell an asset. The standard signal line is calculated as a nine -day exponential gliding average. It is also called the Trigger Line.

There are basically three techniques that are used to evaluate and interpret the gliding average divergence conversionGENE. They are: crossover, divergence and crossover zero lines. Crossovers can be bull or bear. When MACD drops below the signal line, this bear signal is a sign that it can be time to sell asset. On the other hand, MacD, which rises above the signal line, is bull and suggests that prices can rise. It's a signal to buy.

Divergence occurs when the price of the asset moves opposite the gliding diameter of convergence divergence, a signal that has ended this trend. The cross line takes place when the MacD line rises with a central line that is zero. It is a bull signal and can be a signal of purchase for traders. The MacD lines that have fallen on zero line are bear and therefore for many signal sales -traders. Most technical merchants use the average average divergence of convergence one of the many tools in their business arsenal.

Usually traders prodkaThey can make a week -long MACD scale to get a temporary view of the market before looking at the daily scale. This ensures that the trader does not carry out short -term trades that go against the predominant temporary trend. Many traders take special preventive measures by implementing the price filter before making bull shops on the gliding average crossover. For example, they may require that the average divergence of convergence increases above nine -day EMA. He must stay there for at least three days; At the end of the third day, the purchase signal is issued.