ForexGen`s MACD

Used to catch trends early and can also help us spot trend reversals .

It consists of 2 moving averages (1 fast, 1 slow) and vertical lines called a histogram, which measures the distance between the 2 moving averages.

Contrary to what many people think, the moving average lines are NOT moving averages of the price. They are moving averages of other moving averages.

MACD’s downfall is its lag because it uses so many moving averages.

One way to use MACD is to wait for the fast line to “cross over” or “cross under” .