Moving Average Conversion - Divergence (MACD)

One very important forex trading indicator that is based on moving averages is called the Moving Average Convergence Divergence, or the “MACD.”

Many traders use this indicator to decide entry- and exit-points from trades. Some, on the other hand, say that it lags trends too far. Experience on your own behalf will enable you to decide.

How Is MACD calculated?

The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.

The Best Forex Brokers + Trading Platforms

Broker	Our Rating	Description	Minimum Deposit	Regulation	Visit
AVATrade	4.5	Trusted, regulated broker with 10 yrs experience Multi award winning company Segregated accounts with leading banks	$100	Central Bank of	Visit Broker AVATrade Review T1 ROTW
XM Group	4.5	Free forex signals + market research Online education and webinars Fee free withdrawals and deposits	$5	CySEC, FSP, ASIC	Visit Broker XM Group Review ROTW
FBS Markets.	4	Split second execution No requotes Range of accounts	$5	IFSC	Visit Broker FBS Markets. Review ROTW
IQOption	5		10	IQ Option is a	Visit Broker IQOption Review
Easy Markets	4.5	Free Guaranteed Stop Loss Segregated funds at top tier banks Fixed spreads & negative balance protection	$100	ASIC, CySEC	Visit Broker Easy Markets Review T1 ROTW
HF Markets Ltd. (HotForex)	3.5	8 Trading Platforms Spreads from 0.1 Pips $0 fees on deposits	$5	FSC & CySEC	Visit Broker HF Markets Ltd. (HotForex) Review ROTW
Plus500	4	No commissions and low spreads Advanced trading tools Minimal account fees	€100	FCA, CySec :	Visit Broker Plus500 Review T1 ROTW
Markets.com	4.5	Tight spreads without commissions Advanced charting tools	$100	CySec, MiFID, FSA	Visit Broker Markets.com Review T1 ROTW
FXPrimus	3	Trusted by 100,000s of traders Fully licensed in the EU by CySec Tight spreads and fast withdrawals	$100	FSC Mauritius	Visit Broker FXPrimus Review ROTW
InstaForex	3.5	'Asia's top broker' Wide choice of leverage options	$1	RAFMM, The Federal	Visit Broker InstaForex Review ROTW
OLYMP TRADE	4		10		Visit Broker OLYMP TRADE Review

Broker rankings last updated 08/08/2022 14:12

When the MACD falls below the signal line, it is a bearish signal, which indicates that it may be time to sell. On the other hand, when the MACD rises above the signal line that is a bullish signal, which suggests that the price of the currency pair is likely to move higher.

Some traders also interpret divergence from the MACD as a clear signal of momentum. In other words, a falling MACD and a rising price suggest that momentum is turning higher.

This is not a strategy that all adopt, and it depends very much on long-time observation of a given currency pair.