. In Stock technical analysis, MACD usually use for signal line crossovers, centerline crossovers and divergences to generate signals.Below an example use in Stock:
In Forex, we use MACD for Convergence & Divergence.
Divergence means disagreement, Convergence means agreement.
MACD should be the same with price action, therefore when price makes a new high, so do MACD. If the pattern is not repeated, then you'll have a Divergence.
Divergence is the strongest technical analysis in Forex. Let's check the 2 Divergence : Bullish Divergence & Bearish Divergence.
Example: Bullish Divergence for USD/JPY, Daily Chart.
Example: Bearish Divergence for USD/JPY, Daily Chart.
Take note the MACD Divergence is a very powerful indicator of momentum change compare with MACD Convergence. It always show a bounce off from the previous trend.
Next, let's see how we can study the pulse of trading - Price Cycle
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2 comments:
May you please further elaborate MACD like how to apply...... when not to apply ...... Any good method to improve it?
I apply & study MACD regularly. I think, it's hard to be workable as a entry and exit signal.
However, it serves as an excellent trend confirmer, especially after a position is established.
I'll post another topic again about technical analysis..Please continue to support..thanks.
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