How to read MACD?Submitted by admin on February 23, 2008 - 13:24. |
How to read MACD?
MACD stands for Moving Average Convergence Divergence. This technique is one of the most often used by the different simulator software as performing the technical analysis of stock trend using this method is easy and very straightforward. As I mentioned, the MACD works well both for a "long term", middle term and intraday trading systems.
Use MACD for timeframe H1 or above.
MACD may have a lot of signal of Buy/Sell signal, I will explain some. So when we have buy/sell?
REVERSAL STRATEGY
Reversal Buy
1. If MACD below 0
2. MACD before smaller than MACD now
3. Previous MACD above MACD signal
Reversal Sell
1. If MACD above 0
2. MACD before bigger than MACD now
3. Previous MACD below MACD signal.
DIRECT STRATEGY
BUY
1. If 2 previous MACD still below 0
2. If previous MACD above or under 0
3. If MACD now above 0 or is cutting from under 0 to the 0 going upward
SELL
1. If 2 previous MACD still above 0
2. If previous MACD below or above 0
3. If MACD now belowr 0 or is cutting the from the top above 0 and downwards below 0
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