How Successful The MACD Indicator
Regardless of your Forex strategy, have you ever entered trades and shortly afterwards wished you hadn't? The information that follows will hopefully cut down greatly on the number of trades that cause you anxiety! The MACD (Moving Average Convergence Divergence) indicator can add a degree of certainty to your Forex strategy. As with any indicator, it is too risky to enter trades on this signal alone. However, as we will see, used with caution on higher time frames, it can help confirm you are going in the right direction and that your trade is higher probability. Taking MACD Apart Let's take MACD apart and describe it's component parts. The default MACD on most charting packages sets 2 EMA's (Exponential Moving Averages) at 26 and 12 days. This is represented by a colored line (color varies according to charting package) which crosses a different colored 9 EMA often termed the trigger line. When MACD (the 12/26 EMA) crosses above the ...