MACD Trading Strategy - MACD Indicator for Mt4

 Everything You Need to Know About Using MACD (Moving Average Convergence Divergence)

MACD (usually pronounced Mac-Dee) stands for Moving Average Convergence Divergence.

The MACD is the difference between the value of the 12 period EMA (exponential moving average) and the 26 period EMA of the asset price.

In short, the MACD indicator gives the short to medium term trend of the price action. A positive MACD value indicates upward price trend while a negative MACD value indicates a downward price trend.

There is also a histogram which measures the difference between the MACD line and the signal line. The histogram can help to assess the velocity of the upward or downward movement.

Buy & Sell Signals

Crossover Signals

Buy signal is generated when the MACD line crosses above the signal line.

Conversely, a sell signal is generated when the MACD line crosses below the signal line.

MACD Divergence Strategy

Another strategy often employed by traders using the MACD to find trading opportunities is the MACD divergence strategy.

When the MACD diverges from the price action, it can signal the end of a trend.

Bullish Divergence

Bearish Divergence

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