Description
MACD (Moving Average Convergence/Divergence) is an oscillator study that is widely used for assessment of trending characteristics of a security. Calculated as the difference between two price averages, this indicator also provides a signal line, an average of that difference. Crossovers of the MACD plot and the signal line often produce valuable signals for trend analysis.
When the MACD plot crosses above the signal line, an uptrend may be emerging; conversely, when it falls below, a downtrend is likely to be identified. The difference between the MACD and signal values is plotted as a histogram, which may sometimes give you an early sign that a crossover is about to happen. Actual indication of the crossovers can be enabled by setting the show breakout signals parameter value to yes.
Input Parameters
| Parameter | Description |
|---|---|
fast length
|
The number of bars used to calculate the fast moving average. |
slow length
|
The number of bars used to calculate the slow moving average. |
macd length
|
The number of bars used to calculate the moving average of MACD. |
average type
|
The type of moving average to be used in calculations: simple, exponential, weighted, Wilder's, or Hull. |
show breakout signals
|
Controls indication of MACD crossovers above and the signal line. |
Plots
| Plot | Description |
|---|---|
Value
|
The Moving Average Convergence/Divergence plot. |
Avg
|
The moving average of the MACD. |
Diff
|
The difference between the MACD and its moving average (MACD Histogram). |
ZeroLine
|
Zero level. |
UpSignal
|
If enabled, displays an up arrow every time the MACD crosses above the signal line. |
DownSignal
|
If enabled, displays a down arrow every time the MACD crosses below the signal line. |
Example*
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.