MACD

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Welcome to currency trading with Profiforex!
This video is devoted to the "MACD" indicator.
To apply it to the chart, press the "Indicators" button on the toolbar and choose "Oscillators" - "MACD."

Subsequently, the window in which wechange the indicator properties appears.Here we can choose the periods of three moving averages: method, fix maximum and minimum. Visualization settings can be changed in the "Colors" tab.

When we're choosing the method, we specify the prices to which the indicator will apply.These are open prices, close prices, maximums, minimums and their different combinations.

MACD seems to be the most famous indicator and can be called "simplified Stochastic." It helps to make its data more simple for analysis and closer to the price with smaller delays. At the same time, false signals aren't filtered very well.

The MACD indicator was devised by Gerald Appel. Its structure includes three moving averages.

There are two lines plotted on the chart:The first line (the MACD line) shows the difference between two exponential moving averages.

The second line is the approximation of the first line (averaged by the defined parameters). 

Signals are formed in the same way as signals of any other classical oscillator.

The signal to buy occurs when the instrument is oversold. The signal to sell occurs when the instrument is overbought.


Divergence.Divergence is the situation in which the price and technical indicators move in different directions. In classic literature,divergence is considered to indicate a major shift in the direction of the trend.