I Talked in previous article about Ichimoku Kinko Hyo indicator you can read it through this link
Today I will explain MACD Indicator and how to use it in Forex trading
MACD Indicator
.MACD Indicator is a developing for moving indicator
MACD means simply the convergence and divergence between two lines of movingMACD acronym for Moving Average Convergence Divergence and used in predicting
the new trend and what is the expect of trend whether rise or fall
The Frame Time that it uses is : 12,26,9 MACD
This indicator is provided on Metatrader program , you can add it by clicking on insert then oscillators then MACD
The Components of MACD
.MACD 9.26.12 (blue line) is considered moving for 9 days and it moves rapidly
The Line of Signal (red line) is considered moving 12 days merged with moving 26 days and it moves slowly
Balance Line : it is dotted line where the MACD lines cross at one level
The Histogram bars appear on the zero line , above of it the bars will become green under zero line the bars will become red
If MACD lower than zero line that means the trend is bearish , if the MACD higher than zero line the trend will be bullish
MACD Cases in The Market
If the red moving broke blue macd the balance happen and the market stops temporarily
If the rapid blue line broke the slow red line from top to bottom here will be selling signal
If the rapid blue line broke the slow red line from top to bottom here will be selling signal
Histogram Bars
The Bars determine the relation between rapid MACD line and the slow moving
If the two lines (divergence) The histogram bars will grow in size
If the two lines (convergence) The histogram bars will reduce in size
If the histogram bars above of balance line that means that the blue line above of red line
If the histogram bars under balance line that means that the red line above of blue line
There're Main Three Ways to Trade Using MACD Indicator
Trading by appearing the first bar above or under zero line
Trading by divergence or convergence
Trading by crossing the lines then blue MACD breaks zero line
Firstly : Trading by appearing the first bar above or under zero line
Buying signal : If the firs bar (green) above of zero line , it will be buying sign
Selling signal : If the firs bar (red) under zero line , it will be selling sign
Secondly : Trading by divergence or convergence
Convergence : means two separated things tend to specific point
Divergence : means two separated things move away from specific point
It will be buying sign when the convergence happen
It will be selling sign when the divergence happen
Thirdly : Trading by crossing the lines then blue MACD breaks zero line
Buying sign : when we see the blue MACD breaks the red Moving from the bottom to top then it breaks The zero line to top also
Selling sign : when we see the blue MACD breaks the red Moving from the top to bottom then it breaks The zero line to bottom also
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