The MACD indicator explained simply and understadably. // MACD trading strategy, MACD histogram, EMA


The MACD indicator explained simply and understadably. // MACD trading strategy, MACD histogram, MACD EMA, MACD explained, MACD strategy, MACD trading, MACD forex, MACD tutorial, MACD indicator strategy, MACD indicator settings, MACD indicator tutorial, MACD settings, MACD indicator settings, MACD stock trading, MACD stock, MACD signal, MACD setup, MACD analysis, MACD basics, MACD crossover, MACD crossover strategy, MACD for beginners, MACD formula, MACD trading system, MACD two lines welcome to looking at the markets with David Moadel i have received requests to discuss the MACD and so let’s go ahead and do that alright here we go what is the MACD well i’m using Apple as an example today apple stock and this is a daily chart each candlestick represents one day of price action and my chart came from stock charts dot-com just want to give them credit alright so the MACD is a quick way of saying moving average Convergence divergence macd it’s a lot easier to say macd so we’ll just go ahead and call it that alright so what is all that stuff mean it is a momentum indicator that means that it tells the general direction okay so are we looking at a stock that in the short to medium term does it has tended to trend upward downward sideways so that’s what it does it tells the general direction in the short to medium term now you have several parts to the MACD indicator you have the black line and that is right here you can see the black line and that is called the MACD line that’s the that’s the black line then you have the red line and that is called the signal line that’s the red line and then you have these blue bars here kinda looks like a bar graph the blue bars that’s called the histogram so those are the three parts you need to pay attention to with the MACD so what are these three parts while the black line that’s the MACD line now on the standard macd settings and so if you go to stock charts dot-com they’ll by default they’ll put it on the standard settings on the standard macd settings the MACD line it is the 12-day exponential moving average minus the 26 de exponential moving average so that’s the mathematical formula for the black line but you don’t really necessarily need to know all of the math involved in it you just want to know for now since we’re just doing the basics you want to know that the the black line the MACD line it gives the short-to-medium term trend of the price action in other words has the stock been trending up or down or sideways ok so you can see which way in the short to medium term in the past with the black line the MACD line you can you can glance at it and quickly tell whether it has recently whether the the stock or commodity or ETF for currency or whatever whether the price action lately has been going down or up or sideways over here here at jumped-up word it’s a quick way to gauge the short-to-medium term trend of the price action that’s the MACD line what about the red line that’s the signal line well on the standard macd settings it is the nine-day exponential moving average of the MACD line or the black line ok so basically the signal line the red line is just a smooth out less choppy version of the MACD line so the as you can see the the red line yeah it doesn’t chop around as much it smoother compared to the MACD line and the signal line is that’s less choppy it’s more smoothed out because it’s a moving average of the MACD line to put it very simply people who use the MACD can use it as a buy or sell signal and of course it’s not a perfect indicator it does not work every single time I don’t know any indicator that does so be aware of that so it can be used however as a possible buy or sell signal people they might buy when the MACD line crosses above the signal line like it does here and here ok and they might sell when the MACD line crosses below the signal line like it does here crosses below or here crosses below what about the blue bars that’s called the histogram on the standard macd settings it is the MACD minus the signal line basically it just shows how far above or below the mac the MACD line is in relation to the signal line so how far above or below is the MACD line compared to its signal line alright so like for example over here we can see that the MACD line is above the signal line ok it’s you can see over here they’re about the same and so the histogram shows that they’re about the same and then as the MACD line goes more and more further above the signal line the histogram grows taller and taller now over here we can see that the MACD line is about the same as the signal line and so the histogram is flat and then as it goes more and more below its signal line the histogram reflects that it shows it by going lower and lower so it just shows how far above or below the MACD line is compared to its signal line or for example over here they’re pretty close together and the histogram is flat the MACD is a quick way to gauge the trend of the price action and the histogram can help to assess the velocity of the upward or downward movement how quickly in other words is it going up or down what’s the velocity the histogram shows here that it’s going down faster and faster and over here it’s showing it’s going up faster and faster and over here and here’s a long stretch of it just kind of going sideways maybe with a slight upward bias but mostly sideways the relation of the MACD line to the signal line in other words is the MACD line crossing above or below the signal line can be used as a possible buy or sell signal as well alright so that’s my basic introduction to the MACD I hope it was helpful and you can add it to your your toolbox or Arsenal so to speak of indicators alright so if you like this video please give it a thumbs up on YouTube and leave comments and subscribe to my youtube channel and you can contact me by email anytime at David Modell @ gmail.com if you have questions or you want to make a comment or if you just want to put together a trading plan by all means feel free to email me anytime thanks a lot i appreciate it and I’ll talk to you again soon also before I forget I just wanted to dedicate this video to Wendy hi Wendy and also i plan on putting out a newsletter or even a couple of newsletters possibly so just let me know if you’d be interested in possibly receiving a weekly email with a newsletter possibly on marijuana stocks my favorite pics or options my favorite options trades every week or you know what else would you be interested in receiving information about so you let me know my email address once again David Modell @ gmail.com or leave comments letting me know what you might be interested in seeing what kind of information you want and also what do you want to see in future videos I’d like to see that as well thank you so much i appreciate it and I’ll talk to you soon thank you for watching please like comment and subscribe and I’ll see you next time

100 thoughts on “The MACD indicator explained simply and understadably. // MACD trading strategy, MACD histogram, EMA”

  1. Youare truly a great teacher. I am into cyptocurrency, do you do any videos on that? If so, I would greatly appreciate it.

  2. Love your videos.ย  You are great at explaining things.ย  I always lookย for your videos on YouTube.ย  Thanks again…

  3. VERY MUCH THANKS TO YOUR VIDEO.
    PLEASE MAKE A VIDEO ON MOST PROFITABLE INDICATOR OF FOREX TRADING.
    I WAIT YOU.

  4. Thanks Dave.. straightforwardly informative for beginners. Beautiful… Do you have video on defining MACD parameters for forex day traders or for short-term ttimeframe?

  5. Thanks David.. For the default settings of MACD, what is the recommended time frame should I use, is 1 Hour appropriate?

  6. Hi david moadel, your explain is very clear & "short". may i know this MACD is suitable for stock only or it is also suitable for others? example: crude oil, soya bean (commodity ) ?

  7. If I'm day trading I currently will have on my screen a 5-minute a one minute and a daily along with 12 minute chart every one of these have a macd on them so I can get a general idea of the difference time spans and then on the daily of course is it overall trending up or down. Question is with the one minute is the macd really valid at all or is it such a low time frame that the moves really aren't going to get much out of them if that makes any sense

  8. I just logged into my YT channel to Like, comment and subscribe to your channel! Thanks for the Incredibly easily understandable video.Cheers.
    Keep the videos coming we are here to learn.

  9. Hello Dear Mr. David, I went through your MACD Tutorial. It is excellent and to the point. I would like you to do the same for Belkhayate Timing Indicator in English language. Happy Day. Abdelgadir Algak, [email protected]

  10. Hi Mr.Moadel, thank you for the simple breakdown of MACD. I have been studying the โ€œHow Toโ€™sโ€ of investing for a couple of months. Have a long long way to go. With the help from people such as yourself , Iโ€™m learning a lot very quickly. Thank you again for the time you have put into the videos. My question is the โ€œEMAโ€. Example: The signal line is a 9 day EMA. Which means what? What is the EMA or what does this represent ? Thanks again….

  11. At 4:35 minutes: This is true. How many times can any indicator work? We don't know this. Over time the average of success may be poor.

  12. Another indicator that make sense to me. What I always love with your video, everything was explained short and simple but yet everything was there. Million thanks.

  13. SO, touching knowing the number of losers in BITCOIN , BINARY and FOREX trading investment, if crosschecked you find out we are the cause simply because we refuse to locate professional brokers/investors, being successful in trading is all about having a good broker who know how,when and when not to invest money,using the right strategy and above all knowing how to read the trend. feel free to contact me via [email protected] if you desire a professional investor i will assist you invest your money and become a millionaire in trade.

  14. Fantastic video, you explain amazing way. Step by step. Awesome. I appreciate and thanks for your wonderful video.

  15. Thanks for the video. I have understood the basic clearly. Does TA work in every stock exchange? I think it doesn't work in Dhaka Stock Exchange, Bangladesh. Can you please check the index of DSE and give your valuable opinion?

  16. Your explanation is so clear and easy to understand. I really appreciate you taking the time to upload this. Super informative. Iโ€™m practicing swing trading with cryptocurrency but the technicals and indicators can be used in any market whether itโ€™s FOREX, Stocks, Gold, Silver, Crytocurrency, ect… You should put up a Bitcoin or Litecoin Address. Iโ€™d send a donation for this video. =]

  17. Great video and I learn a lot. Do you do a video on Stocastics and RSI. I'm trying to get into Option trading and looking for a few good indicators

  18. Subscribed! Is the histogram used in the same way yo indicate buy or sell? For example at the end of the chart it seems to be getting larger. Would that indicate that it will return to a smaller value or continue the trend of getting bigger. When does it indicate either?

  19. David, for about a year I've been trading with robots and I have lost so much using them. So, I was looking for the best method how to trade manually and you are one of the best who explained the simple way how the MACD indicator works. For the last 2 weeks I've been training myself and trading on a demo account. Still I need a lot to learn, but I'm getting into that point. Thank you very much.

  20. What are some indicator that work great with the macd line. I am starting to get into trading any help is helpful thank you

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