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MACD Indicator Oscillator Indicator Analysis FastLine & Signal-Line

MACD indicator is used in various ways to give trading analysis data.

  1. MACD center line crosses show bullish or bearish markets: below the zero is bearish, above zero is bullish.
  2. MACD Crossovers indicate a buy or sell xauusd trade signal.
  3. Oscillations can be used to indicate oversold & overbought regions
  4. Used to look for divergence between gold price & indicator.

Construction of MACD

The MACD indicator is constructed using two exponential moving averages MAs and this gold indicator draws 2 lines. The two default exponential moving averages used are 12 and 26. Then a smoothing factor of 9 is also applied when drawing the MACD technical indicator.

Summary of how MACD indicator is drawn

MACD uses 2 EMAs + a smoothing out factor (12, 26 Exponential MAs & 9 smoothing periods)

MACD indicator only plots two lines - the MACD fast line and the MACD signalline

How to Trade Gold with MACD Fast Line and MACD SignalLine Gold Strategies - MACD Technical XAUUSD Trading Indicator

MACD Lines - MACD Fast-Line and MACD SignalLines Trading Signals

  • The FastLine is the difference between the 26 Exponential Moving Average & 12 EMA
  • The Signal-line is the 9 period moving average of MACD fast line.

Implementation of MACD Indicator

MACD indicator implements the MACD line as a continuous line while the signal-line is implemented as a histogram. These two MACD LINES are then used to generate xauusd signals using the crossover strategy method.

There is also the MACD center-line which also is referred to as the zero mark & it's a neutral point between buyers & sellers trading the market.

Values above the center-mark are considered bullish signals while those below are bearish gold trade signals.

MACD indicator being an oscillator trading indicator, oscillates above and below this center line.

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