The aforementioned oscillators are all about reversals. The technical indicators below pinpoint trends, or at least they endeavor to. Of course, if the reversal is the trend, you’ve got yourself another problem coming.
Gerald Appel’s MACD is one of the most intuitive technical indicators around. It amplifies the value of moving averages in a fashionable way to track both trend and momentum in a non-reversal scented sort of semi-twist.
The MACD plots the difference between two moving averages, usually the 26-period and 12-period. A 9-period moving average of the MACD is then plotted as the signal-triggering line. If you see a histogram on a MACD plot, it is the difference between the MACD line and its signal line. No, this has nothing to do with burgers, be they MACDonald’s or what not.
In a trending market, the space between two different moving averages expands. The MACD deducts the shorter moving average from the longer one, thus its value rises in a bull trend and falls in a bear trend. If the MACD is above the signal line, you guessed it, it’s considered bullish. If MACD is below the signal line, it’s bearish. In addition, the histogram delineates the momentum of the market. High positive histogram values mean strong bullish momentum; high negative histogram values mean strong bearish momentum.
=> Price Channels – Bollinger Band
Gerald Appel’s MACD is one of the most intuitive technical indicators around. It amplifies the value of moving averages in a fashionable way to track both trend and momentum in a non-reversal scented sort of semi-twist.
The MACD plots the difference between two moving averages, usually the 26-period and 12-period. A 9-period moving average of the MACD is then plotted as the signal-triggering line. If you see a histogram on a MACD plot, it is the difference between the MACD line and its signal line. No, this has nothing to do with burgers, be they MACDonald’s or what not.
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| Image source: google.com |
In a trending market, the space between two different moving averages expands. The MACD deducts the shorter moving average from the longer one, thus its value rises in a bull trend and falls in a bear trend. If the MACD is above the signal line, you guessed it, it’s considered bullish. If MACD is below the signal line, it’s bearish. In addition, the histogram delineates the momentum of the market. High positive histogram values mean strong bullish momentum; high negative histogram values mean strong bearish momentum.
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| Image source: google.com |
=> Price Channels – Bollinger Band
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