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My Favorite Indicator - MACD |
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Sound familiar? You have spent years surfing the 'Net, and studying books and charts in search of currency trading strategies or forex trading strategies. All you really want is the 'Holy Grail' of entry techniques. You usually end up adding one indicator on top of another, switching from one guru to the next, until you are so confused and unsure of your entry system that you are unable to make entry decisions and stay organized. You get so distracted and frustrated that you quit watching the markets all together! Shows you how FAST you can make money when the BIG DOGS make their move - by shamelessly copying this winning group . Even I am STILL surprised by how much power they have over the currency markets. My Favorite Indicator - MACDMACD, which stands for ‘Moving Average Convergence Divergence,’ is a trend-follower/market momentum indicator/oscillator all wrapped up into one package – a great addition to your currency trading strategies (a.k.a. forex trading strategies). Technically speaking, it is the difference between a fast exponential moving average and a slower exponential moving average. For the uninitiated, an exponential moving average is a weighted moving average that assigns greater emphasis to more recent price action. ‘Convergence’ simply means that the fast moving average line continually converges toward or diverges away from the slower moving average. MACD also consists of a third, dotted exponential moving average, called its ‘trigger’ line. The significance of one lining crossing the other is that such movement signals either a buy or sell signal – MACD crossing above its signal line denoting a buy, below a sell. MACD can be used in any timeframe, but the higher the more powerful its effect. In addition, MACD can be used to detect overbought/oversold conditions. A buy situation exists when MACD is below the neutral 0 line, meaning that the underlying market is oversold. Similarly, a sell situation occurs when MACD is above its ‘water line,’ again suggesting the market is overbought. In actual fact, however, the exact opposite interpretation can be made. When MACD crosses above the zero line, market strength is implied; crossing below that line signals weakness. My favorite use of MACD is identifying periods of divergence, wherein price action says one thing and MACD the exact opposite. This translates into a shift in momentum or the start of a trend reversal. Bearish (negative) divergence occurs when MACD makes new lows, while price reaches new highs (a sell warning). On the flip side, bullish (positive) divergence results from MACD making new highs, all the while price achieves new lows (a buy warning). The effect of divergence is further magnified at overbought/oversold levels. Higher level charts produce more robust indications of divergence. When it comes to currency trading strategies or forex trading strategies, you will find a whole lot more in my internationally acclaimed course at ... "Free" personal consultation with each purchase "No-Games, No-Strings" Money Back Guarantee Even experienced traders know they have more to learn. No matter what currency you're in, whether your preference is euros, yen, the franc or the pound, whether you're a beginner who needs a concrete plan or a seasoned trader, or simply looking for information on how to use the right data, you've come to the right place. Most traders who come to us just want to know how to trade currencies against the 'dumb money,' and ... How To Make A Full-Time Income Trading Less Than Part Time Find out what a blind, three-legged dog with
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