Understanding MACD (Part 3)

04/30/2008 12:00 am EST

Focus:

MACD (Moving Average Convergence / Divergence) as a histogram the lines plotted on the bottom of the MACD are trying to tell a story as well, and traders had better listen up! Moving average convergence divergence was not randomly chosen as this indicator’s name. Through the histogram we can visually gauge convergence (moving average lines of MACD moving towards one another) and divergence (moving average lines of MACD moving away from one another).

Notice: as the moving average lines cross the histogram will show no lines whatsoever, indicating to traders that lines (prices) should now start in a new direction.

More in part 4 tomorrow.
Learn more at InterbankFX University

  By clicking submit, you agree to our privacy policy & terms of service.

Related Articles on

Keyword Image
Cognizant: From AI to IT
2 hours ago

Cognizant Technology Solutions (CTSH) began operations in 1994 as an in-house technology development...

Keyword Image
Walgreens: Value or Trap?
2 hours ago

Walgreens Boots Alliance (WBA) was on a nice run when we bought in back in October. But that all cha...