MACD Crossover Signals
MACD center line crossovers generate trading signals using the center-line mark. The sentiment of the market can be confirmed using MACD centerline cross-overs. MACD forex crossover above the center line mark generates bullish market sentiment while cross-over below the center line generates bearish market sentiment.
- When the FastLine crosses below MACD Line (not center line) it shows market momentum is slowing - this isn't a reversal signal or a sell trading signal, wait out for the center line mark crossover.
- When the Fast-line crosses above MACD Line (not center line) it shows the market momentum is slowing - this isn't a reversal setup or a buy trade signal, wait out for center line mark crossover.
- The Center Line cross-over signals will be the best signals for confirming buy & sell signals.
In the chart below, when the MACD fast line dipped below the zero center mark, that confirmed a sell signal - and the market sentiment switched to bearish.
Also on the exemplification shown below when MACD fast line later crosses above zero center line mark, a buy trading signal was generated & the market sentiment changed to bullish - upward trend.
MACD Zero-Line Crossover: Identifying the Precise Moments for Buy and Sell Trade Signal Generation.
Oscillation of the MACD
MACD is an oscillator that swings around a zero line. Above zero means a bullish trend. Below shows bearish moves.
The MACD can also be utilized to indicate zones of over-extension (overbought or oversold). When the MACD reaches extremely high or low values, it signals that a currency is overbought or oversold. However, in a vigorously rising market, prices might remain in an overbought state, making a buying action the preferable decision in such a scenario.
Also, when the market is strongly going down, it's better to sell because prices will stay very low for a while.
Overbought levels occur way above zero line while over-sold conditions/levels form way below zero mark.
MACD Overbought Region - Trend Continuation Signal
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- How Can You Place Symbol on MT4 Trading?
- How is SX 50 Index Traded in the MT4 & MetaTrader 5 Software Platform?
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- Is Trade Index Better than Trading?
