MACD Indicator Oscillator Technical Analysis Fast Line and Signal Line

MACD indicator is used in various ways to give analysis information.

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

Construction of MACD Indicator

The MACD indicator is constructed using two exponential moving averages and this trading technical indicator plots two 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 xagusd indicator.

Summary of how MACD indicator is drawn

MACD uses 2 EMAs + a smoothing factor (12, 26 Exponential Moving Averages and 9 smoothing periods)

MACD xagusd trading technical indicator only plots two lines - the MACD fast line and the MACD signal line

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

• The FastLine is the difference between the 26 Exponential Moving Average and 12 EMA
• The Signal-line is the 9 period moving average of the 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 2 MACD LINES are then used to generate signals using the crossover trading strategy method.

There is also the MACD center line which is also known as the zero mark & it is a neutral point between buyers and sellers trading the market.

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

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