# What is the MACD indicator and why is it so special?

|**What is the MACD indicator and why is it so special:** This indicator is very suitable for identifying input or output points. The MACD provides signals corresponding to the beginning and end of the trend.

## Fast and Slow Lines

It May seem that understanding the principles behind the MACD is more difficult than putting the indicator into practice. To better illustrate the logic of the moving average of convergence/divergence we can resort to exponential mobile mean (EMA) with periods of 12 and 26.

**The following observations can be made By looking at the top image:**

The intersection of two mobile media lines in the price graph corresponds to the intersection of the MACD (blue) fast line and the horizontal zero line. The value of the MACD is equal to the difference between exponential mobile averages with corresponding periods.

The Slow MACD (orange) line in the indicator window is the average of the MACD (blue) line.

## Red and Green Lines

**The Green bars will appear in the MACD window when:**

1-The Fast line is above the slow line and the distance between the two lines is growing;

2-The Fast line is below the slow line and the distance between the two lines is declining.

**The red bars will appear in the MACD window when:**

1-The Fast line is below the slow line and the distance between the two lines is growing;

2-The Fast line is above the slow line and the distance between the two lines is declining.

It Seems a bit complicated but the general idea behind the bars is simple. When The blue line moves rapidly upward or slowly downward compared to the Orange Line, the MACD will show green bars. Otherwise, the bars will be red.

## MACD Configurations for daily Trading

To Use the MACD flag in daily operations, click the «Indicators » button in the lower left corner of the screen. Then Choose the MACD from the list of possible indicators.

Click «Apply » If you want to use the flag with standard parameters. Or You can also adjust periods and fast and slow signals on the Open tab.

The sensitivity of the indicator can be increased by decreasing the fast period and increasing the slowness.

## How to use the indicator in the daily trading?

Thanks to the complex nature of the indicator, there are many ways to start the MACD.

**Signal Line Crosses.** An upward trend Is expected when the fast line appears and crosses over the slow line. A bearish trend Is expected when the fast line appears and crosses below the slow line.

**Centerline Crosses.** An upward trend Is expected when the fast line that moves above the zero line becomes negative.

**Divergences.** Divergences appear when the price graph and the graph of the MACD show a direct opposite movement. An upward divergence is formed when a value reaches a low register and the MACD forms a higher low point than that. A bearish divergence is formed when a value reaches a record upward and the MACD forms a lower double crochet than it.

The MACD gives operators the opportunity to simultaneously use a trend and impulse tracking indicator. It can be applied in both short and long intervals, which makes it the ultimate tool in the hands of a professional.