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See the MegaTraders MACD technical indicator on interactive charts now. Click here.
| Category: | Phase Lag |
| No. of Plots: | 3 (hereafter MACD, SIG and M-S) |
| Screen Location: | Below bars / candlesticks |
| Plot Style(s): |
MACD - Red line SIG - Blue Line M-S - Cyan bars |
| Plot Significance: |
MACD - Red line (MACD) SIG - Blue Line (EMA of MACD. Often called the signal line) M-S - Cyan bars (Difference between MACD and SIG) |
| Details: |
The MACD is another old-school indicator (like RSI) which gained popularity amongst traders. It is a trend following indicator but suffers from Phase Lag. Patterns of interest for your research are when: WARNING: buying the market every time MACD crosses SIG (heading up) and selling every time MACD crosses SIG (heading down) will almost certainly lose money over time. Generally, when M-S is positive it suggests market strength. Whereas, when M-S is negative it suggests market weakness. |
| Indicator Characteristics: |
Sudden increases in market volatility are likely to cause the prior data to appear compressed on the chart. For example MACD may have a range in the window of say +10 to -5, then suddenly jump +10 to -35. This can make interpretation difficult at times. |
