How to use the Moving Average Convergence Model

2018년 4월 13일

The "Moving Average Convergence Model," also known as the "MACD Model," is one of the most widely used indicators for trading endeavors. It consists of two lines representing the short term and long term moving averages. The blue line represents the 12 day short term moving average or SMA for short. Likewise, the orange line represents the 26 day long term moving average or LMA for short.

As shown in the chart, the SMA recently confirmed it's drop below the LMA. This drop displays that in the short run, the stock's price has moved below the long run average. Knowing this, you can imply that the support level has been broken and the asset will begin its decent in price.

In the past, you can observe how when the orange line is above the blue line, the price plummets. And while the blue line is above the orange line, the stock price increases.

To Get Started With MACD:
1) Head to your chart and hit the "Indicators" tab in the top middle.
2) Type "MACD" in the search bar
3) Start off with the original one at the top, as you become more advanced with the indicator you can pick and choose a better option for you

Typical Intervals May Be:
- 12:26 (typical interval)
- 13:34 (for very short term trading)

2018년 4월 14일

노트

Correction:
This would actually be an example of a "Divergence" model due to the separation circled.