What do you think of MACD index? First of all, let's take a look at its composition:
1, two different smooth curves, DIF stands for fast line (short-term) and DEA stands for slow line (long-term).
2. The intersection of the fast line and the slow line.
Golden fork: the fast line exceeds the slow line, that is, DIF breaks through DEA upwards, which is the reference of buying signal.
Dead fork: the slow line exceeds the fast line, that is, DIF falls below DEA, which is the reference for selling signals.
3. Red and green histograms
The red bar graph indicates that the difference between the two curves is positive, and the green bar graph indicates that the difference between the two curves is negative. The histogram reflects the potential energy of the current trend.
4. Zero axis
The zero axis separates the red and green histograms.
If both curves are above the zero axis, it means that the bulls are strong;
If both curves are below the zero axis, the bears are strong. It is worth noting that in this case, even if there is a golden cross, the stock price may not necessarily rise.
2. Application of 2.MACD
This part is a summary of MACD integration just analyzed.
Below the zero axis is the short-selling force. If the histogram continues to change from large to small under the zero axis, it means that the decline is small; When the fast line exceeds the slow line under the zero axis, a golden cross appears, which is the reference of the buy signal.
Above the zero axis, the bulls are strong. If the histogram continues to change from large to small on the zero axis, it means that the increase is small; When the slow line on the zero axis exceeds the fast line, a dead fork appears, which is the reference of the selling signal.
In particular, when we observe the changes of stock price and MACD index, we can clearly see that MACD histogram and curve reflect the trend of stock price, but it has a certain lag. For example, before the golden fork appeared, the stock price had risen; Before the death fork appeared, the stock price had fallen.
3. Deviation and deviation
Deviation: There is a big gap between the fast line and the slow line. As shown in the above figure, there is a deviation when it rises, indicating that the stock price will fall; The deviation of the decline indicates the rise of the stock price.
Deviation: the trend of K line is inconsistent with that of MACD indicator.
As far as the unilateral trend is concerned, if the red-green histogram starts to become shorter and shorter, the motivation to reflect the rise or fall of stock prices is getting weaker and weaker. If the stock price is rising, but the MACD indicator is falling, this indicates that the trend is over. In this case, we suggest you stop chasing up.
From the overall trend, there are two situations: top deviation and bottom deviation.
When the stock price goes higher and higher, but the red bar chart goes lower and lower. It shows that the price increase process is weak and the external force is weak, suggesting that there will be a wave of decline soon in the future, which belongs to the top deviation; When the stock price trend is getting lower and lower, the green histogram is getting higher and higher. It shows that the kinetic energy of price decline is insufficient, suggesting that there will be a wave of rebound in the future.