Macd Prediction Amibroker Buy Sell Afl is the best for trend decide. MACD stands for Moving Average Convergence Divergence. This is the most simplest technical tool ever used by technical trader for predict stock trends. This technique has gained popularity among traders for its reliability in predicting share market, Macd does not provide exact entry or exit points but gives the direction of the stock quite consistently.
Construction of MACD
MACD itself is constructed by subtracting the Long Term Moving Average of the stock from Short Term moving average. The Long Term is taken as recent 26 days and the Short Term is taken as recent 13 days. The Short Term Moving Average is more responsive than its longer moving average. The plot will oscillate above and below zero, with no upper or lower limits. It is usually drawn Blue in color.
- The Signal Line is the Moving Average of the MACD itself and is drawn Red.
- There would a be histogram that is a visual aid of the difference between the Signal line and MACD oscillator
In a Charting Software you would find both Fast MACD and Slow MACD.
Fast MACD is generally constructed by taking moving averages of 10 and 5 days to show recent developments and is more responsive but is prone to give false signals. The Slow MACD is constructed by taking 26 days and 12 days MA, though it is less responsive to recent changes but is more accurate in prediction.
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