Many traders are eager to learn the MACD. He said the MACD can be used to more accurately detect the state trend through its divergence. In this article we will discuss the MACD and how to use them in the market. So how effective is the MACD indicator used in the price? Let’s look at the MACD indicator at the bottom of this review.
Probably comes to mind is why should we bother using the MACD but only a reduction of XMA alone. Not so in reality. Through this simple formulation turns MACD can provide information not only forecast the trend but could know more than the trend itself.
MACD can be used to determine the momentum transfer is considered strong or weak, can also be used to determine overbought / oversold on the market that can trigger the transition trend.
MACD stands for Moving Average convergen Divergent. This indicator is used to look at the average motion graphics, also to see the irregularities that occurred. In the event of deviation we can get into the market. Because at that time the price will reverse direction to form a long trend.
This is a typical usability of MA used in the MACD line and the MACD line triger. How to read the trend of transition towards Bearish and Bullish otherwise similar to the way we read the transition trend in MA. Line is used to read the MACD line and the triger line. Let us consider the image below:
Deviation in question here is:
1. Convergent
A condition in which the graph indicator modestly higher yet. When there is a convergence graph will reverse its direction to ride. So what we did was open buy. Its entry point is when the stem is higher than the previous histogram after convergent.
2. Divergent
A condition in which the graph is high but the indicator modestly. After the divergent direction of the market will be turning down. Entry pointnya is when the rod is lower than the previous histogram after diverging.
I need to know is if we get in the market at the time of intersection between the signal line histogram, ensured that market conditions will move from saturated conditions. Divergence is rare, but it helps us to know that at least you do not blame the market in the event of false signals.
So, what happens when really happening false signals? If is really happening false signals, it’s time we change the period of the MACD line and the triger line that we use and do not blame the market.