Traderji.com - Discussion forum for Stocks Commodities & Forex


MACD Moving Average Convergence Divergence

Discuss MACD Moving Average Convergence Divergence at the Technical Analysis within the Traderji.com - Discussion forum for Stocks Commodities & Forex; hi guys and gurus Though I am able to understand a bit about Moving Averages ...


Go Back   Traderji.com - Discussion forum for Stocks Commodities & Forex > METHODS & STRATEGIES > Technical Analysis

Technical Analysis Discussion of all the principles involved in technical analysis.


Reply
 
Thread Tools
  #1  
Old 29th January 2006, 06:40 PM
Member
 
Join Date: Jan 2006
Posts: 351
Thanks: 156
Thanked 124 Times in 92 Posts
adultvish has a spectacular aura aboutadultvish has a spectacular aura about
Question MACD Moving Average Convergence Divergence

hi guys and gurus
Though I am able to understand a bit about Moving Averages and MACD, yet I need some clarification. MACD is constructed by making an average of the difference between two moving average. The difference of the original two moving average and the moving average of the difference can be plotted as t wo lines, one fast and one slow. Can anyone please help me understanding the complete and true meaning, of the afore stated statement. I will be highly obliged.

Thanking you in advance.

Adultvish



Reply With Quote
Sponsored Links
  #2  
Old 30th January 2006, 05:31 PM
Member
 
Join Date: Jan 2006
Location: bangalore
Posts: 11
Thanks: 0
Thanked 0 Times in 0 Posts
SRINIPYT is on a distinguished road
Thumbs up Re: Use of MACD

Quote:
Originally Posted by adultvish
hi guys and gurus
Though I am able to understand a bit about Moving Averages and MACD, yet I need some clarification. MACD is constructed by making an average of the difference between two moving average. The difference of the original two moving average and the moving average of the difference can be plotted as t wo lines, one fast and one slow. Can anyone please help me understanding the complete and true meaning, of the afore stated statement. I will be highly obliged.

Thanking you in advance.

Adultvish
Hi: Go thro url http://www.worden.com/training/defau...g=posts&t=3978 - listen to Craig's 8 minute presentation on what is MACD - since you know the basics of MACD - PRESENTATION will give you a good insight. u can also visit chart school - www.stockcharts.com and investopedia. we can discuss further once u r thro. srini
Reply With Quote
  #3  
Old 1st February 2006, 03:03 AM
Member
 
Join Date: Feb 2006
Posts: 3
Thanks: 0
Thanked 0 Times in 0 Posts
yoda is on a distinguished road
Default Re: Use of MACD

adultvish,

I read a new site that uses elliott wave primarily, but uses the MACD as a confiormation in their studies. They deal with the forex markets and seem to know what they are talking about with the MACD.

www.capitalcurrencymarkets.com

hope it helps out

Y
Reply With Quote
  #4  
Old 1st February 2006, 04:47 PM
Member
 
Join Date: Mar 2004
Posts: 340
Thanks: 0
Thanked 54 Times in 18 Posts
TATrader has a spectacular aura aboutTATrader has a spectacular aura about
Default Re: Use of MACD

Thanks SRINIPYT,

A great video for all TA to view.
Reply With Quote
  #5  
Old 7th February 2006, 08:28 PM
Member
 
Join Date: Aug 2005
Posts: 859
Thanks: 179
Thanked 276 Times in 155 Posts
rajesh.sadhanala is a jewel in the roughrajesh.sadhanala is a jewel in the roughrajesh.sadhanala is a jewel in the rough
Smile Moving Average Convergence - Divergence

Hi All,

Can anyone explain me how it is being calculated and populated. Can anyone taken an example of some stock and explain me. It would be helpful for me to understand it.

Thanks a Lot
Raj
Reply With Quote
  #6  
Old 8th February 2006, 03:07 PM
Member
 
Join Date: Jul 2004
Location: chennai
Posts: 544
Thanks: 39
Thanked 436 Times in 162 Posts
tanewbie is a glorious beacon of lighttanewbie is a glorious beacon of lighttanewbie is a glorious beacon of lighttanewbie is a glorious beacon of lighttanewbie is a glorious beacon of light
Default Re: MACD Moving Average Convergence Divergence

MACD is calculated as below:

1st step : calculate 12days ema of close (exponential moving average)(lets call it Fast mov average)
2nd Step: calculate 26days ema of close (lets call this as slow moving average)
3rd step: take difference of the abv 12days ema and 26days ema. This is MACD
4th step : calculate 9 days ema of the diff in step 3 . This is signal line.

buy when macd crosses the siganl line from below. Sell when macd pierces signal line from above.

The best use of MACD is finding divergences wrt Price and macd.
price falling and macd making hihger bottoms is a positive divergence and Price going up and MACD making lower tops is negative divergence.

MACD as an indicator for trading signals is good for delivery stocks. I use it for whose fundamentals are good. One such stock is ESAB. I am attaching chart of esab with macd.
I always bot few hundred shs of esab whenever it gave a buy signal. I just sold few shs in Oct meltdown at 390 but it bounced back. As I know the fundamentals of this company I like to add on macd signals.

Last edited by tanewbie; 2nd August 2008 at 12:19 PM.
Reply With Quote
  #7  
Old 8th February 2006, 03:29 PM
Member
 
Join Date: Jul 2004
Location: chennai
Posts: 544
Thanks: 39
Thanked 436 Times in 162 Posts
tanewbie is a glorious beacon of lighttanewbie is a glorious beacon of lighttanewbie is a glorious beacon of lighttanewbie is a glorious beacon of lighttanewbie is a glorious beacon of light
Default Re: MACD Moving Average Convergence Divergence

attached chart of Garden Silk. An example of negative divergence wrt price and macd.

Last edited by tanewbie; 2nd August 2008 at 12:19 PM.
Reply With Quote
  #8  
Old 8th February 2006, 03:35 PM
Member
 
Join Date: Jan 2006
Posts: 17
Thanks: 4
Thanked 0 Times in 0 Posts
srisrini is on a distinguished road
Default Re: MACD Moving Average Convergence Divergence

Sir,

Thanks for explaining MACD calculation in simple words. This will enable me set up an excel sheet to follow the indicator.
Regards.
Srisrini
Reply With Quote
  #9  
Old 8th February 2006, 08:56 PM
Member
 
Join Date: Aug 2005
Posts: 859
Thanks: 179
Thanked 276 Times in 155 Posts
rajesh.sadhanala is a jewel in the roughrajesh.sadhanala is a jewel in the roughrajesh.sadhanala is a jewel in the rough
Smile Re: MACD Moving Average Convergence Divergence

Really Thanks you for ur help. I will just put it what I understood. Please correct me If I miss out anything.

Calculate last 12 days close of particular stock and find it average price.
Formula = (day1 close + day2 close ... + day close12)/12 - Fast Mov Avg

Similary like above for 26 days - Slow Mov Avg.

The difference is MACD. If the Fast Mov Avg - 80 and Slow Mov Avg - 70. Then difference is 10.

4th step is confusing. I interpreted it that instead of 26days use 9 days ema. This is signal Line.
Here the difference is 15.

Buy if MACD > Signal
Sell if MACD < Signal.

Please correct me if I am wrong.

Regards
Raj
Reply With Quote
  #10  
Old 8th February 2006, 08:57 PM
Member
 
Join Date: Aug 2005
Posts: 859
Thanks: 179
Thanked 276 Times in 155 Posts
rajesh.sadhanala is a jewel in the roughrajesh.sadhanala is a jewel in the roughrajesh.sadhanala is a jewel in the rough
Default Re: MACD Moving Average Convergence Divergence

Quote:
Originally Posted by tanewbie
MACD is calculated as below:

1st step : calculate 12days ema of close (exponential moving average)(lets call it Fast mov average)
2nd Step: calculate 26days ema of close (lets call this as slow moving average)
3rd step: take difference of the abv 12days ema and 26days ema. This is MACD
4th step : calculate 9 days ema of the diff in step 3 . This is signal line.

buy when macd crosses the siganl line from below. Sell when macd pierces signal line from above.

The best use of MACD is finding divergences wrt Price and macd.
price falling and macd making hihger bottoms is a positive divergence and Price going up and MACD making lower tops is negative divergence.

MACD as an indicator for trading signals is good for delivery stocks. I use it for whose fundamentals are good. One such stock is ESAB. I am attaching chart of esab with macd.
I always bot few hundred shs of esab whenever it gave a buy signal. I just sold few shs in Oct meltdown at 390 but it bounced back. As I know the fundamentals of this company I like to add on macd signals.

Thanks to u for putting up the explanation. I just wrote what I understood. Please correct me If I am wrong anywhere


Reply With Quote
Reply

Bookmarks


Advertise Here


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads for: MACD Moving Average Convergence Divergence
Thread Thread Starter Forum Replies Last Post
MACD - Moving Average Convergence Divergence Traderji Technical Analysis 11 21st February 2013 02:35 PM
MACD Convergence Divergence gopu Technical Analysis 26 3rd June 2010 12:30 PM
Macd Masterchief Technical Analysis 6 22nd March 2010 11:37 AM
MA vs MACD sgkalai Technical Analysis 9 6th December 2007 11:01 PM
Metastock - missing MACD histogram cmlee MetaStock 3 24th February 2005 08:24 PM


All times are GMT +5.5. The time now is 05:43 PM.

Indemnity, Disclaimer & Disclosure Notice:
By visiting Traderji.com you automatically indicate that you agree to our Forum Rules, Indemnity, Disclaimer & Disclosure Notice and General Content Disclaimer Notice and indemnify Traderji.com, its associates and related parties of all claims howsoever resulting from the usage of the forum/site.
Disclaimer: Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. You are recommended to make appropriate enquiries and seek appropriate advise before sending money, incurring any expenses, acting on recommendations or entering into any commitment in relation to any advertisement published here. Traderji.com does not vouch for any claims made by the advertisers of products and services. Traderji.com will not be held liable for any consequences in the event such claims are not honoured by the advertisers. Traderji.com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of any information by anybody mentioned anywhere on this site.
Disclosure: The information in this forum is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.
All names or products mentioned are trademarks or registered trademarks of their respective owners.
General Content Disclaimer Notice:
In light of our policy of encouraging candid, open exchanges of views and the rapid distribution of information originating from many sources, Traderji.com cannot determine the accuracy or legality of any information that may be uploaded to the forum. Opinions, advice and all other information expressed by participants in discussions are those of the author. You rely on such information at your own risk. You are urged to seek professional advice for specific, individual situations and not rely solely on advice or opinions given in the discussions. Since Traderji.com is an open and free discussion forum, any comments made by members of this forum in their posts reflect their own views and not of the owner or administrator of Traderji.com. Thus the owner/administrator indemnify themselves of all claims whatsoever and will not be liable or responsible for any members comments/views in this forum Traderji.com. Although we constantly delete all irrelevant content and/or SPAM, if you should find any objectionable or offensive posts made by members of this forum which you would like to bring to our notice for removal then please Contact Us.
 


Copyright © www.Traderji.com 2001 - , All rights reserved.

Recommended Websites - www.TradersEdgeIndia.com - www.TradingPicks.com - www.MasterOfTrading.com

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246