The MACD - Moving Average Convergence / Divergence
Earlier this indicator forex consisted of two lines of different colors. Later, a histogram was added to them to identify more accurate signals.
Here's how the MACD is displayed on a live chart:
Using a complex formula for calculating, I analyze the moving averages (line indicator). One of them is a fast (short-term), another slow (long-term). A histogram of the zero line shows us the difference between the current price of the asset and moving averages.
Histogram The principle is simple: if the histogram is growing, and the price of an asset will rise. Conversely, if the histogram falls, and the price of an asset decreases.
LED signals, which I open the transaction:
- Curve indicator - moving average is called MACD. The orange line - is the name of the signal.
- When the MACD line crosses the signal line from top to bottom, this is a signal for me to open a PUT option.
- When the MACD line crosses the signal line upwards, it is a signal for me to open a CALL option.
In addition, to obtain accurate signals should be used Stoch and RSI indicators.