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Welcome to My Trading Room, Volume III by Jacques Magliolo

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CHAPTER 7

Searching for Momentum and Strength

Fortune sides with him who dares.

—Virgil (70 BC–19 BC)Roman poet

Strategy to Professional Status: Part IV—Phase 3

Aim: This is the second step in the technical analysis process to trading. Trend patterns have been recognized, momentum identified, and confirmed by strength indicators.

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Looking for Momentum

The MACD

Definition: The letters MACD stand for moving average convergence divergence, and it is a technical oscillator that is based on a mathematical formula. It is effectively price movement aimed at overbought and oversold signals.

This signal is easily available on most software packages, ...

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