Trading Using MACD indicator

Moving Average Convergence Divergence - MACD indicator is one of the most favorite Forex technical indicator and used by beginners and expert traders. The MACD indicator moves based on Moving Average indicator. As its name MACD Moving Average Convergence Divergence.

Gereald Appel made the MACD indicator Moving Average Convergence Divergence in 1979 and it used in stock trading market, but this Forex technical indicator works well in Forex trading market too.

Moving Average Convergence Divergence MACD technical indicator is a great indicator in Forex trading analysis, which moves based on oscillators and trend indicator. MACD indicator works in trending market and also in the reversal market. MACD indicator is combination between two moving average indicator - Exponential moving Average trend indicator 12 and 26 days moving average. MACD histogram is the simple moving average 9 days period.

How to trade Using MACD indicator

The slope of histogram assists you to read the Forex movement and identify the market trend direction:
Bullish trend considered when the current histogram is higher than the previous.
Bearish trend considered when the current histogram is lower than the previous.

The accurate trading signals showed when histogram MACD cross the zero line 

We can open buy trading position when the MACD histogram cross above the zero line and we can open sell trading position when the MACD histogram cross below the zero line. Another trading signals that made by MACD technical indicator is divergence between market price and MACD indicator. This divergence trading signals is the most powerful trading signals from MACD trading indicator.

Bullish divergence signal occurs when the market price moves bearish but the MACD histogram moves bullish.
Bearish divergence signal occurs when the market price trades bullish but the MACD histogram trades bearish.

MACD indicator is one of the most powerful Forex technical indicator. The MACD trading signals are very clear and easy to read.