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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: Chris who wrote (2798)	7/24/1997 4:08:00 AM
From: Chris	of 42787

TA --- " Indicator : MACD -- Moving Average Convergent Divergent" #3: This is a continuation in Sean's macd post: techstocks.com MACD is a trend-deviation oscillator. It is actually two moving averages used in calcualtion where they converge and diverge around the zero line. The zero line represents when the two moving averages are idential. Some popular parameters seen on the threads are: 8/17/9 as mentioned by sean (good short-term MACD) 13/34/89 (good long-term MACD) ================ Ways to use MACD: 1) simply use the zero line as trigger line. buy signal when MACD above zero, vice versa. 2) use buy/sell signals with the signal line (this is the 3rd variable in the macd parameter list. Eg. 13,34,89 --> 89 is the moving average of the difference of 34 and 13. So 89 is the signal line. 3) as Sean pointed out, look for convergence/divergence. Again, convergence means MACD (or any other indicator) is moving higher as price is going higher. Divergence means MACD (or any other indicator) is falling and price is going higher. inverse relationship. one is heading up and other is heading down. 4) Use trendlines to find patterns within the macd. I don't personally use it, but others have.. try it yourself. ================== My thoughts: I think MACD is the easiest "visual" indicator one can use. Very easy to use and very effective in showing trends. Just play with the parameters to get your time frame. ================== Additional references: geocities.com geocities.com Alot on MACD there... ========= remember to look at the weekly time frame!!! Very very effective if used in this manner.. especially with the MACD.. ================== Any comments? Chris

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