What Is MACD Explained
Understanding MACD: A Comprehensive ExplanationMACD, which stands for Moving Average Convergence Divergence, is a popular technical analysis indicator used by traders to identify potential trends in the market. It consists of two lines - the MACD line and the signal line - that help traders determine when to buy or sell a particular asset. The MACD line is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA, while the signal line is a 9-period EMA of the MACD line. When the MACD line crosses above the signal line, it is seen as a bullish signal, indicating a potential uptrend in the market. On the other hand, when the MACD line crosses below the signal line, it is considered a bearish signal, suggesting a possible downtrend.
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