Technical Tip Tuesday #2: MACD Divergence

MACD stands for Moving Average Convergence Divergence.  The MACD is a special type of indicator known as an “oscillator” and is used to measure the bullish or bearish momentum during trending markets.  The MACD consists of a histogram (the red and green bars) and a moving average & signal line.  When used in combination, the histogram and moving average/signal line can reveal a lot of information regarding the strength of weakness of a move in a given direction.  The goal of this video is to provide an introductory level of understanding that will allow the viewer to spot divergence (weakening strength in a given direction) over both macro and micro trends.

 

Leave a Reply

Your email address will not be published.