# How to use MACD indicator Author: Trade Pro Skills

Saturday, 25 May 2019 Number of words: 302 Study time: 2 Minutes Views: 1519 Topics

### What we will learn here

Different categories of Technical indicators

About MACD (General information)

How to use MACD in our trades

Different settings and what is Best setting

### Different categories of Technical indicators

Totally we can divide Technical indicators into 3 different categories:

Trend-following indicators: (some example)

I. Moving averages (both simple and exponential),

II. MACD (Moving Average Convergence Divergence),

III. Parabolic SAR,

IV. ADX (Average Directional Movement Index)

Momentum indicators: (some example)

I. Relative Strength Index (RSI),

II. Stochastics,

III. Commodity Channel Index (CCI)

Volatility indicators : (some example)

I. Bollinger Bands and

II. ATR (Average True Range)

### About MACD (General information)

Moving Average Convergence/Divergence (MACD)

MACD created by Gerald Appel in the late 1970s. This is a technical indicator that mostly can be used to realize the trend if it is Short or Long. MACD calculation based on historical prices mostly closed price. This indicator can show us strength, direction, momentum, and duration of a trend and you can use it for most of the time frames from M5 up to Monthly time period. The MACD series is the difference between a "fast" (short period) exponential moving average (EMA), and a "slow" (longer period) EMA of the price series. The average series is an EMA of the MACD series itself. How you can see below, technically this is the way how this indicator works, however today we will talk about how we can use it and not going into mathematics calculation.

## MADC Strategy – Setting

MACD Can show help us to realize the trend, where it can change and strength of that as well as period.

What is behind of MACD setting:

MACD Line:   12 days EMA – 26 days EMA

Signal Line:   9 days EMA of MACD Line

MACD Histogram: MACD Line – Histogram Line

* EMA Means :Exponential Moving Average

Let's go to the live chart and see how it works and learn more secret issues behind of that!

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