MACD, also known as convergence and divergence of moving averages, is developed from double moving averages. Subtract the slow moving average from the fast moving average. The meaning of MACD is basically the same as that of the double moving average, but it is easier to read.

When MACD turns from negative to positive, it is a buy signal. When MACD turns from positive to negative, it is a signal to sell. When the MACD changes at a large angle, it means that the gap between the fast moving average and the slow moving average expands very quickly, which represents the change of the market trend. MACD was put forward by Geral Appel in 1979. A technical index that uses the aggregation and separation between the short-term (usually 12) moving average and the long-term (usually 26) moving average to judge the trading opportunity.

Formula algorithm

The difference between short-term and long-term smma of DIF line (difference).

M-day index smma of DEA difference line.

The difference between MACD line diff line and DEA line lies in the color column line. In MACD indicators, the red energy column and the green energy column represent the strength of bulls and bears respectively. Their response to the market is ahead of the short-term moving average DIF. In MACD index, the process of energy release is a gradual process, usually gradually enlarged. Oriental philosophy emphasizes that "Yang rises and falls, while Yin rises and falls". When using the energy column, the red energy column combined with the K-line chart shows that when the K-line chart rises nearly 90 degrees, coupled with the rapid amplification of the red energy column, it shows that the top of the general trend is near. Especially when two adjacent red energy columns are connected, the market will be more rapid. On the contrary, in the short market, this phenomenon is also true. Being familiar with this operation method will be of great benefit to investors' escape from the top and bargain-hunting.

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