MACD
Moving Average Convergence Divergence (MACD) is a technical analysis indicator used to identify momentum in the markets. It is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. The result is then plotted against a signal line, which is the 9-day EMA of the MACD line. The MACD line is used to identify when the momentum of a security is increasing or decreasing. When the MACD line crosses above the signal line, it is a bullish signal, indicating that the security is likely to move higher. Conversely, when the MACD line crosses below the signal line, it is a bearish signal, indicating that the security is likely to move lower.
History of MACD
MACD was developed by Gerald Appel in the late 1970s. Appel was a technical analyst who believed that the markets were driven by momentum. He developed the MACD indicator to identify when the momentum of a security was increasing or decreasing. The MACD indicator has become one of the most widely used technical indicators in the world. It is used by traders and investors to identify potential trading opportunities in the markets.
Comparison Table
| Indicator | 12-day EMA | 26-day EMA | 9-day EMA |
|---|---|---|---|
| MACD | 12 | 26 | 9 |
Summary
Moving Average Convergence Divergence (MACD) is a technical analysis indicator used to identify momentum in the markets. It is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. The result is then plotted against a signal line, which is the 9-day EMA of the MACD line. The MACD line is used to identify when the momentum of a security is increasing or decreasing. MACD was developed by Gerald Appel in the late 1970s and has become one of the most widely used technical indicators in the world. For more information about MACD, you can visit Investopedia, TradingView, and StockCharts.
See Also
- Relative Strength Index (RSI)
- Bollinger Bands
- Stochastic Oscillator
- Average Directional Index (ADX)
- On Balance Volume (OBV)
- Parabolic SAR
- Fibonacci Retracement
- Price Channel
- Moving Average
- Volume Weighted Average Price (VWAP)
