A Short and Exclusive Guide on MACD Indicator
Moving Average Convergence/Diversion (MACD) Indicator
MACD is used to identify the over trend of an asset and most notably the momentum and Bearish Divergence creates a selling opportunity while Bullish Divergence creates a buying opportunity trend duration. MACD is very informative due to the reason that it makes use of two indicators.
First, MACD employs two Moving Averages of varying lengths (which are lagging indicators) to identify trend direction and duration. Then, MACD takes the difference in values between those two Moving Averages (MACD Line) and an EMA of those Moving Averages (Signal Line) and plots that difference between the two lines as a histogram which oscillates above and below a center Zero Line.