FX Technical Analysis: What is an MACD Indicator
Posted: October 26th, 2009 | Author: admin | Filed under: Forex Analysis | Tags: Forex Analysis, forex technical analysis, forex tool, fx technical analysis, MACD indicator | No Comments »The MACD indicator is one of the most useful tools of FX technical analysis but it is not usually well understood. This is a pity because many traders could probably use it more effectively if they understood it better.
The letters of its name stand for Moving Average Convergence Divergence. It is true that the name sounds rather complicated and unfortunately this is often enough to put people off from wanting to know more. So they only use the very simplest applications without understanding the power of the tool itself.
Like most forex tools, this indicator is used to show us when a new trend is forming, so that we can get in on it and make money. The MACD does this by plotting the relationship between two moving averages.
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