It make use of the Exponential Moving Average in its construction. There are 2 lines created and plotted against each other.
The MACD Line is the difference between the two exponential moving averages.
Recommended value is 12 , 26.
The Signal Line acts as a trigger. When the MACD line crosses the signal line it triggers a buy/sell signal.
Recommended value is 9.
MACD has 3 usages.
1) Signal Line Crossover
2) Zero Line Crossover
3) Divergence
See the picture for detail.
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