Indices Trade with MACD Fast Line and MACD Signal Line
How to Analyze MACD Fast Line and MACD Signal Line Indices Trading Strategies
MACD technical indicator uses various methods to give technical analysis information.
- MACD center line crossovers signal bullish or bearish stock indices price moves; below MACD zero center line is a bearish indices signal, above MACD zero center line is a bullish indices signal.
- MACD Center Line Crossovers indicate a buy stock indices signal or a sell signal.
- MACD Indices Indicator Oscillations can be used by stock indices traders to signal oversold and overbought levels
- MACD indicator can also be used to look for divergence between stock indices price and MACD indicator.
Construction of MACD Technical Indicator
The MACD technical indicator is constructed using two exponential moving averages and this MACD technical indicator draws two lines. The two default exponential moving averages used are 12 and 26 EMA. Then a smoothing factor of 9 is also applied when drawing the MACD indicator.
How MACD indicator is drawn - How to Read MACD Trading Signals
MACD indicator uses 2 EMAs and a smoothing factor (12 EMA, 26 EMA and 9 smoothing periods)
MACD technical indicator only draws two lines - the MACD fast line and the MACD signal line
How to Read MACD Trading Signals
- The MACD Fast-Line is the difference between the 26 EMA and 12 EMA
- The MACD Signal-line is the 9 period moving average of the MACD fast line.
Implementation of MACD Technical Indicator
MACD indicator implements the MACD line as a continuous line while the MACD signal line is implemented as a histogram. These 2 MACD LINES are then used to generate indices signals using the MACD crossover indices trading strategy method.
There's also the MACD center-line which is also referred to as zero center mark and it's a neutral point between the buyers & the sellers which are trading the stock indices market.
MACD values above the center line mark are considered as bullish indices trading signals while MACD values below the center line mark are considered as bearish stock indices signals.
The MACD technical indicator is an oscillator indicator - MACD indicator oscillates above and below the center line mark.
How to Read MACD Indices Signals - How to Interpret MACD Indices Indicator?
