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Forex Trading & the Use of the MACD Indicator
By Adrian Pablo
As a forex trader you must always be looking for a way to have a complete insight of the market and how to use the behavior of the currencies in your favor and stay away from losing trades that can affect your traders account capital.
There are a number of forex technical indicators that will be of great help as a set of compasses ready to give you an answer even in the most stormy market conditions. There are Bollinger bands, Fibonacci levels, RSI, Moving Averages, among others. These indicators are formulas that consider the state of the markets at different times and according to an analysis of the "recent history" of the forex market they will give you an indication about what should be done, this is, if entering a trade (buy or sell) has a high probability of being profitable or if you should wait for better market conditions.
One of the most used technical indicators is the MACD, this stands for, Moving Average Convergence Divergence. In short the MACD plots the difference between a 26-day exponential moving average and a 12-day exponential moving average. Along with these two lines there is also the plot of a 9-day moving average that is used as a trigger line. This means that when the MACD crosses below this trigger line it is a signal that prompts you to sell and when the MACD crosses above the line, it's a buying signal.
We can also see the MACD indicator as this; If the MACD turns positive, this is, if it makes higher lows consistently during a period of time, this could be a strong buying signal. On the other side, if the MACD makes lower highs this could be a strong sell signal.
Forex can be a great way of making a living from home or anywhere else your laptop and internet connection happens to take you. Learn more about the basics of forex trading and the best forex trading systems in the market right now:
=>> http://www.1-forex.com
Article Source: http://EzineArticles.com/?expert=Adrian_Pablo
As a forex trader you must always be looking for a way to have a complete insight of the market and how to use the behavior of the currencies in your favor and stay away from losing trades that can affect your traders account capital.
There are a number of forex technical indicators that will be of great help as a set of compasses ready to give you an answer even in the most stormy market conditions. There are Bollinger bands, Fibonacci levels, RSI, Moving Averages, among others. These indicators are formulas that consider the state of the markets at different times and according to an analysis of the "recent history" of the forex market they will give you an indication about what should be done, this is, if entering a trade (buy or sell) has a high probability of being profitable or if you should wait for better market conditions.
One of the most used technical indicators is the MACD, this stands for, Moving Average Convergence Divergence. In short the MACD plots the difference between a 26-day exponential moving average and a 12-day exponential moving average. Along with these two lines there is also the plot of a 9-day moving average that is used as a trigger line. This means that when the MACD crosses below this trigger line it is a signal that prompts you to sell and when the MACD crosses above the line, it's a buying signal.
We can also see the MACD indicator as this; If the MACD turns positive, this is, if it makes higher lows consistently during a period of time, this could be a strong buying signal. On the other side, if the MACD makes lower highs this could be a strong sell signal.
Forex can be a great way of making a living from home or anywhere else your laptop and internet connection happens to take you. Learn more about the basics of forex trading and the best forex trading systems in the market right now:
=>> http://www.1-forex.com
Article Source: http://EzineArticles.com/?expert=Adrian_Pablo
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