Forex Education Center- MACD stands for Moving Average Convergence / Divergence (moving average konvergention / difference), which is a technical analysis indicator created by Gerald Appel in the 1960s. MACD is an indicator for excess buying or selling excess by looking at the relationship between the MA (moving average = moving average) long-and short-term. The MACD line is the difference of 2 MA above. The second line is a line is a sign of the short-term MA of the MACD line.
MACD shows the difference between the exponential moving average (exponential moving average is commonly abbreviated as "EMA") that rapid and slow closing price. Some development has been done on the MACD for years but still leaves the problem of delay in the indicator, so often criticized for its failure in response to weak market conditions or turbulent. Since the collapse of the market "dot-com" in 2000, most strategies no longer recommend the use MACD as a primary method in the analysis, but only used as a mere observer. Standard period suggested by Gerald Appel in the 1960s is to use the 12 and 26 day periods:
MACD = EMA , price - EMA , price
The signal line or trigger line is formed by refining the formula is then formed by the smoothing this with a further EMA. The standard period for this is 9 days,
signal = EMA, MACD
The difference between the MACD and the signal line is often calculated and expressed in the form of lines but not in the form of a histogram containing box. This construction was made by Thomas Aspray in 1986 Method of calculation:
histogram = MACD - signal
In the example chart above, shows all three simultaneously. The graph above is the price, which is below the graphs have the blue MACD line and the signal line in red and white in the form of a histogram is the difference between the two.
The set of periods of average values are usually written as 12,26,9, and may vary. Appel and other analysts have been experimenting with various combinations.
