How Do You Use Macd In FOREX Trading?
The moving average convergence divergence (MACD) is a popular technical analysis tool invented by Gerald Appeal in 1979. The popularity of the indicator can be attributed to its simplicity and flexibility across different asset classes like forex. In forex it is used to both identify trend lines and track the momentum of a particular currency pair. Understand the meaning of “divergence.” Divergence is used to explain price movements which fall outside of the normal range for trading. Traders refer to this range as the “trend.” Calculate the difference between the 26-day and 12-day moving average. A moving average can be calculated by using a complex mathematical formula. In lieu of this, most any forex tool package will provide you with an option to chart the moving average for almost any time period. The 12-day moving average, because it is averaged over a shorter period of time, will be more volatile (have more price fluctuations) than the 26-day moving average. This is illustrated i
