timetotrade

Help Manual Home Page

Charts
  MACD
  RSI



This is the TimeToTrade help wiki. Use the TimeToTrade Trigger Trading Technology™ to execute your trades when Price, Candle Stick, Trend Line, Volume and Technical Analysis chart conditions are met - no coding required. Trade directly in the world’s global markets. Backtest your Trading Strategies. Calculate your UK HMRC Capital Gains Tax liabilities. Manage your Investment Club.


MACD

The MACD (Moving Average Convergence Divergence) is a trend-following (ie lagging indicator) that measures the difference between two Exponential Moving Averages (EMAs). The MACD is calculated by subtracting a longer term trailing exponential moving average from a shorter term leading exponential moving average. It is plotted on a chart with a signal line which is the smoothed exponential moving average of the MACD. The MACD Histogram is used to provide a bar chart representation of the difference between the MACD and the Smoothed MACD, whereby if above zero, the MACD is bullish and if below zero then it is bearish:


link =//timetotrade.eu/GBPUSD


By default on the timetotrade charts, the MACD Leading Moving Average Period is 12, the Trailing Moving Average Period is 26 and the Smoothing Factor used to calculate the Smoothed MACD signal line is 9. There are many variation on the MACD settings with 10,35,5 also being popular. Adjust the default time and interval parameter values to find the best fit between price movement and the MACD indicators.


link = //timetotrade.eu/GBPUSD



There are several ways in which the MACD is interpreted and it should be noted that it is best used to trade in a trending market. During periods of range bound sideways trading, signals can be unreliable as illustrated above.


Firstly, note that the MACD generally rises and falls with price movement (with a lag as calculations are based on moving averages). MACD rising in value is generally considered bullish, whereas MACD falling in value is considered bearish. When the MACD rises dramatically over a short period of time and reaches extreme values, it can imply that the market is overbought and to expect a price reversal. And vice-versa, should the MACD fall dramatically over a short period of time and reach a negative extreme, it can imply the market is oversold.


The indicator itself fluctuates above and below zero, the ‘centre line’. When MACD is equal to zero, the long and short period exponential moving averages upon which the MACD is calculated, are equal. When MACD is above zero the shorter term average is higher than the longer term average (implying positive momentum and bullish trading sentiment). When MACD is negative, the fast exponential moving average is lower than the longer term exponential moving average, implying negative momentum and bearish trading sentiment. The MACD crossing above and below zero can indicate a change in trend.


Rather than waiting for the MACD to cross zero, an earlier indication of a change in trend is provided when the MACD crosses its signal line. When MACD is below zero and crosses above the signal line, it is considered a bullish buy signal. When MACD is above zero and crosses below the signal line, it is considered a bearish sell sign.


Another method used is to look for divergences. This is where the price makes new lows (or appears to be bottoming out) but the indicator fails to make new lows, or vice versa if the market is making new highs. For example, where price makes a new high but the MACD fails to do similar, this indicates that the trend is starting to run out of momentum and recent price increases are not sustainable, signalling a sell opportunity. On the other hand, where market’s price makes new lows but the MACD fails to do similar, this implies increasing momentum and that the down trend may be coming to an end.


Strategies:

Alert Trigger Signals: Description & Strategy
Break Out Trigger.png Bullish signal: MACD rising

Bearish signal: MACD falling
Threshold Triggers.png Bullish signal: MACD crossing above zero and rising

Bearish signal: MACD crossing below zero falling
Cross Over Triggers.png Bullish signal: MACD crossing above its signal line

Bearish signal: MACD crossing below its signal line


MACD Formula

The MACD is the difference between 2 Exponential Moving Averages (EMA) typically based on 12 for the Leading EMA and 26 periods for the Trailing EMA. The Smoothed MACD signal line is Exponential Moving Average of the MACD and its default is 9 periods.


The formula for calculating the MACD is:

Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \text{MACD } = \text{EMA of CLOSE (} lma \text{)} - \text{EMA of CLOSE (} tma\text{)} }


and the formula for the SMACD is:

Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \text{SMACD } = \text{EMA of MACD (}sf \text{)} }


The MACD Delta is the difference between the MACD and the Smoothed MACD:

Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle \text{MACD Delta} = \text{MACD } - \text{ SMACD} }


where:

  • Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle lma} Leading Moving Average default is 12
  • Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle tma} Trailing Moving Average default is 26
  • Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://api.formulasearchengine.com/v1/":): {\displaystyle sf} Smoothing Factor default is 9


MACD Indicator

The MACD indicator can be displayed on the TimeToTrade charts. To add the MACD indicator to the TimeToTrade charts, go to the chart settings and click on the 'Add Indicator' button. Click on the search box and type the name of the indicator that you are looking for, or for example type MACD and scroll through the results:


Generic Indicator Settings 1.png


After adding the MACD indicator, within the chart settings, click on it to set the parameters and change colours.



MACD Alerts

Alerts can be set up to provide an Email or SMS text message notification of when your MACD indicator chart conditions have been met, backtest trading strategies or execute demo trades. To learn more:



It has never been easier to execute your trading strategy. Our Trigger Trading Technology ® means you can now automatically execute your trades directly in the world’s global markets.


You need never miss a trading opportunity again!


Do you want to:

  • buy when your technical analysis chart conditions are met? Really buy, not just get an email or sms alert?
  • or sell when a support trend line is broken?
  • or back-test your strategy going back as far as 30 years?


TimeToTrade's Trigger Trading Technology™ is truly game changing. It gives you a trading advantage. The power to take your trading to a new level.


Open a FREE TimeToTrade account today to:


  • Trade UK, US and European Shares - apply now
  • Execute trades when your Price, Candlestick, Trend Line, Volume and Technical Analysis chart conditions are met using the Trigger Trading Technology® - learn more - help video
  • Email and SMS Trigger Trading™ Alerts - learn more
  • Trade Off The Chart - learn more
  • Back Test Trading Strategies with up to 30 years of historical data - learn more
  • Create Simulated Trading Accounts to test your Trigger Trading™ Strategies - learn more
  • Real time Forex, UK, European and US stock market data - learn more
  • 170+ Technical Analysis and Candlestick Pattern Indicators - learn more
  • All the tools you need to set up and run a successful investment club - learn more
  • Manage your Portfolio and calculate UK HMRC Capital Gains liabilities and SA 108 CGT Tax Returns - learn more
  • Create Trading Competitions for you and your friends - learn more
  • Apply for a trading account today to get the Live Account Features - apply now


Apply now to try our superb platform and get your trading advantage.



The information and data provided is for educational and informational purposes only. Interpretation and use of the information and data provided is at the user's own risk. All information and data on this website is obtained from sources believed to be accurate and reliable. However, errors or omissions are possible due to human and/or mechanical error. All information and data is provided "as is" without warranty of any kind. We make no representations as to the accuracy, completeness, or timeliness of the information and data on this site and we reserve the right, in its sole discretion and without any obligation, to change, make improvements to, or correct any errors or omissions in any portion of the services at any times. Past performance is not a guarantee of future results. Trading carries a high level of risk to your capital and can result in losses that exceed your deposits. It may not be suitable for everyone so please ensure you fully understand the risks involved.


All services are provided by Mercor Index Ltd. TimeToTrade is a trading name of Mercor Index Ltd (a company registered in England and Wales under number 9479466). Our Registered address is 1st Floor, Aldermary House, 10-15 Queen Street, London, EC4N 1TX. Mercor Index Ltd is authorised and regulated by the Financial Conduct Authority number 679941.


The trading services offered by Mercor Index Ltd are not available to residents of the United States and are not intended for the use of any person in any country where such services would be contrary to local laws or regulations. Subscriptions to TimeToTrade products are available if you are not eligible for trading services.

Retrieved from "?title=MACD&oldid=36910"