Chapter 6: Moving average convergence divergence
In chapter 5 I discussed the most widely used tool in charting: the moving average indicator. One or more moving averages used in conjunction with visual trend interpretation are the backbone of technical analysis and provide a sound platform for strategic decision-making. To refine your analysis there are other tools you can use, and the most important of these is the moving average convergence divergence indicator, abbreviated to MACD. In this chapter I’ll describe how it’s calculated and how you can use it to improve your technical analysis.
Moving average difference
The MACD indicator is based on moving averages but provides some additional indications that can help to refine your analysis. ...