MACD - Technical Indicators
Usually MACD (Moving Average Convergence Divergence) is calculated by
subtracting 26-day simple moving average from 12-day simple moving
average. Signal line is usually calculated as a 9-day simple moving
average of MACD (red color). Convergence - Divergence is the difference between MACD
and signal line (blue color).
Typically a "buy" signal is generated when MACD is rising above the
signal line and
a "sell" signal is generated when MACD is falling below the signal line. In
other words when divergence becomes positive this can be interpreted as
buy signal and when divergence becomes negative this is a sell signal.
MACD is calculated using the following formulas: