Name: FXS-MACD
Characteristic: Trend Direction
Parameter Defaults:     Length     28
Plots: MACD
  Signal
  Histogram

Moving Average Convergence and Divergence (MACD) was developed by Gerald Appel as a means to anticipate crossovers in moving averages that could potentially imply a reversal in price direction. The MACD line is constructed by taking two exponential moving averages and subtracting the value of the longer moving average from the shorter moving average. A signal line is then calculated by taking a 9-period exponential moving average of the MACD line.

EUR/USD (1 day 1 yr.)
 Usage

There is no difference in usage between the standard MACD and FXS-MACD. The benefit of the FXS-MACD is that the MACD line tends to be smoother and suffers fewer whipsaws such as that shown in the daily chart of the EURUSD. Note how the FXS-MACD remained positive for the entire uptrend and avoided the three occasions when the standard MACD crossed lower. This is also seen in the histogram, representing the difference between the MACD line and the signal, which remains above zero for this period.

[ Previous ]  [ Up ]  [ Next ]

Legal disclaimer and risk disclosure

Pro Commentary, FX-Strategy, FX-Strategy Pro Charts, and any related products or services, are analytical tools only and are not intended to replace individual research. The information provided here should not be relied on as a substitute for extensive independent research before making your trading/investment decisions. FX-Strategy is merely providing this service for your general information. No representation is being made that any software or training will guarantee profits or not result in losses from trading. The views are not necessarily those of FX-Strategy, its owners, officers, agents or employees. In addition any projections or views of the market provided may not prove to be accurate. FX-Strategy will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this service. Be sure to closely read and understand the risks of foreign currency trading as described on the FX-Strategy website.