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The MACD indicator is one of the most popular trend indicators that help traders to analyse the current trend using the past data of a security. you can easily find this indicator in the oscillator section of the Expert Option.
How to configure the MACD indicator on the Expert Option?
To configure the MACD indicator on the Expert Option follow the steps given below.
Firstly log in to your Expert option account next click on the indicator button. now search for the MACD indicator in the list and click the name.
You can surely change the colour of the indicator’s line or darken the width of the line for better visibility and the best results.
What is the MACD indicator?
- The MACD indicator stands for moving average convergence and divergence. you can also pronounce this indicator as either ‘MAC – DEE’ or M-A-C-D.
- This indicator what developed by Gerald Appel in 1979.
- The indicator is made from the two Exponential moving average lines name the MACD line and the signal line.
- The other two most important component of this indicator is the histogram line and the zero line.
- The two moving average lines ribbons around the histogram and the zero line. which helps traders to analyse upcoming trends and reversals.
- The zero line and histogram line helps traders to verify the strength of the trend.
About indicator lines
- The MACD line is the difference between 12 days Ema and 26 days Ema.
- The signal line is the nine days EMA of the Macd line.
- The Histogram line is the difference between the MACD line and the Signal line and can be used for trend verification.
- The indicator uses a default setting of 12, 26, and 9. as per the experts the default setting works best for the indicator however, you can surely change the indicator settings based on your experience just click on the indicator and set the period.
How to trade with the MACD indicator?
Trading with the indicator is very easy while trading you just need to focus on the intersection of the MACD line and signal line. and use later use the zero line and histogram line for the trend verification.
Place buy trade
When the MACD line intersects the signal line from the bottom. and stay above the signal line for a long period. It signals an upcoming bullish trend. Now, you need to verify the strength of the trend using the zero line and histogram line.
When you have found the bullish trend using the Signal line and MACD line plus you see good green spikes above the zero line in the histogram it is a signal of a strong bullish trend and here you can place a buy trade.
Place Sell Trade
When the MACD line intersects the signal line from the top. and stay below the signal line for a long period. It signals an upcoming bearish trend. Now, you need to verify the strength of the trend using the zero line and histogram line.
Similarly, When you have found the bearish trend using the signal line and MACD line plus you see good red spikes above the zero line in the histogram it is a signal of a strong bearish trend and here you can place a sell trade.