Moving Average Convergence/Divergence

Description

BeMoving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the longer-term EMA exponential moving average (EMA) from the shorter-term EMA. The result of that calculation is the MACD line. An EMA of the MACD called the "signal line," is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals.

Trading Strategy

A buy signal is produced when the MACD crosses above its signal line. A sell signal is produced when the indicator crosses below the signal line.
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Last modified 2mo ago