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Reference Guide / Indicators / MACD- Moving Average Convergence / Divergence

Reference Guide / Indicators / MACD - Moving Average Convergence / Divergence


Name

Moving Average Convergence / Divergence

Definition

MACD, or Moving Average Convergence / Divergence is an oscillating indicator created by Gerald Appel in late 1970's. It essentially uses the difference between a fast and a slow exponential moving average (EMA), where the fast EMA responds quicker to the stock's movements than the slow EMA. Comparison of these two averages reveals the trend changes of the stock. MACD is typically used with a 12 day and 26 day moving average, coupled with a 9 day CROSSUP or CROSSDN action.

Parameters

Parameter 1 
	Definition:    	First Averaging Period (days)
	Default Value: 	26
	Minimum Value: 	1
	Maximum Value: 	100
Parameter 2 
	Definition:    	Second Averaging Period (days)
	Default Value: 	12
	Minimum Value: 	1
	Maximum Value: 	100

Examples

MACD(26,12).CROSSUP(9)
	When 26 and 12 day Moving Average Converge / Divergence crosses up a 9 day moving average 
	
MACD(26,12).CROSSDN(9)
	When 26 and 12 day Moving Average Converge / Divergence crosses down a 9 day moving average 
  	
MACD(25,10).MIN
	When 25 and 10 day Moving Average Converge / Divergence is at its minimum 

Sample Strategy

Moving Average Convergence Divergence - MACD Strategy