| MACD Oscillator | |
|
|
The MACD Oscillator is the difference between a short term and a
long term moving averages.
The three parameters are the number of periods for the short term
moving average, long term moving average and the moving average
of the resulting MACD Oscillator.
This shows the convergence and divergence of the 2 moving
averages and is plotted as the red line around the zero point.
The MACD is presented with its moving average as the green line.
The MACD oscillator is available in the Custom Charts section of
our site.
The Exponential MACD Oscillator uses the exponential moving
averages in the calculations instead of the regular moving
averages.
If you put a zero in the third parameter box, the program will
not calculate the moving average of the MACD and only the red
line will appear, and the resulting MACD is conventionally
presented as a histogram for clarity.
When the MACD Oscillator is above the zero line, conventional
wisdom interprets this as a bullish signal, and conversely, when
the histogram is below the zero line this is interpreted as a
bearish signal. The red line being above the green line
reinforces a bullish signal, and the red line below the green
line reinforces a bearish signal. Other interpretations use
crossovers between the red and green lines as market timing
signals if the resulting direction of both lines is the same.
Going up is bullish, going down is bearish.