Forex and MACD Indicator
Using a MACD Indicator as an integral part of your Forex trading activities can greatly increase the profitability of your trades.
For those new to MACD, this stands for Moving Average Convergence Divergence and it can tell you which trades you should avoid, which currencies you should trade short on and most importantly, which you should trade on for the best profits.
Foreign currency exchange markets move quickly; a trade which can work wonders for you right now may be in a tailspin a mere few hours later.
Wherever possible its important to give yourself the biggest possible potential to minimize losses. By using an MACD Indicator you can actively track those currency pricings that look to be moving on an upward trend. You can also identify any currencies that are ending an upward trend and beginning to trend downward.
How Do MACD Indicators Work?
The MACD is composed of a few different moving average indicators, each of which is pretty straightforward. One is the signal line (also known as the water line). This shows you the exponential moving average (EMA, for short) drawn from closing prices over the last nine days of trading in the currency market.
The upward or downward trend of a given currency are based on two different EMAs. There is a 12 day EMA as well as a 26 day EMA; taken together, these figures give you a better picture of the movements of this currency.
The MACD line will show either above the EMA line or below the EMA line, which gives you an idea at a glance of whether the currency pairing youre considering for your trades are on an upward trend or on a downward trend.
Using A MACD Indicator in Forex Trades
Learning and understanding the movements of the MACD on your charts lets you make better informed trades; and in the Forex market, understanding trends is everything. You can look at one and four hour charts to give you a picture of which way the winds are blowing at the moment in the foreign currency exchange markets.
After developing the habit of keeping an eye on both charts, you`ll start to be able to determine which currencies are on an upward trend as well as which are not. With the one and four hour charts at your disposal, you`ll be able to make much more reliably profitable trades.
Watching the more recent MACD that shows you the hourly chart can be a great way to exercise caution when placing your trades. When the MACD indicator crosses above the water line you have the option of increasing your success rate by placing your forex trade long.
Of course its important to recognize that no single indicator will give you accurate trading results every time. This particular charting system works best when used in conjunction with other signal indicator software and tools as well. However if you do choose to use it on its own to monitor the movements of particular currencies then it is possible to use the MACD indicator to give you a higher chance of trading profitably.
If you want to be as successful as you possibly can as a Forex trader, then a MACD indicator is one tool which you can`t afford to be without. It`s a wise investment in your trading career. - 23217
For those new to MACD, this stands for Moving Average Convergence Divergence and it can tell you which trades you should avoid, which currencies you should trade short on and most importantly, which you should trade on for the best profits.
Foreign currency exchange markets move quickly; a trade which can work wonders for you right now may be in a tailspin a mere few hours later.
Wherever possible its important to give yourself the biggest possible potential to minimize losses. By using an MACD Indicator you can actively track those currency pricings that look to be moving on an upward trend. You can also identify any currencies that are ending an upward trend and beginning to trend downward.
How Do MACD Indicators Work?
The MACD is composed of a few different moving average indicators, each of which is pretty straightforward. One is the signal line (also known as the water line). This shows you the exponential moving average (EMA, for short) drawn from closing prices over the last nine days of trading in the currency market.
The upward or downward trend of a given currency are based on two different EMAs. There is a 12 day EMA as well as a 26 day EMA; taken together, these figures give you a better picture of the movements of this currency.
The MACD line will show either above the EMA line or below the EMA line, which gives you an idea at a glance of whether the currency pairing youre considering for your trades are on an upward trend or on a downward trend.
Using A MACD Indicator in Forex Trades
Learning and understanding the movements of the MACD on your charts lets you make better informed trades; and in the Forex market, understanding trends is everything. You can look at one and four hour charts to give you a picture of which way the winds are blowing at the moment in the foreign currency exchange markets.
After developing the habit of keeping an eye on both charts, you`ll start to be able to determine which currencies are on an upward trend as well as which are not. With the one and four hour charts at your disposal, you`ll be able to make much more reliably profitable trades.
Watching the more recent MACD that shows you the hourly chart can be a great way to exercise caution when placing your trades. When the MACD indicator crosses above the water line you have the option of increasing your success rate by placing your forex trade long.
Of course its important to recognize that no single indicator will give you accurate trading results every time. This particular charting system works best when used in conjunction with other signal indicator software and tools as well. However if you do choose to use it on its own to monitor the movements of particular currencies then it is possible to use the MACD indicator to give you a higher chance of trading profitably.
If you want to be as successful as you possibly can as a Forex trader, then a MACD indicator is one tool which you can`t afford to be without. It`s a wise investment in your trading career. - 23217
About the Author:
About the Author: Samo Yanezic is the Webmaster of Financial Freedom Informant.com - The Net`s Growing Source for Online Home Business and InvestmentsEducation. Visit Us for more help and advice. See also this About Forex page.
posted by X - Men @ 4:12 AM
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