MACD index, also called convergence and divergence of moving average, was created by Chalar Apple. It is a technical analysis tool to judge the timing of stock trading and track the running trend of stock price.

First, the principle of MACD indicators

MACD indicator is a trend indicator, which smoothes the closing price of stock price according to the construction principle of moving average, and then calculates the arithmetic average.

MACD index is a double smoothing operation, which uses fast (short-term) and slow (long-term) moving averages and their signs of aggregation and separation. MACD developed according to the principle of moving average removes the defect that moving average frequently sends out false signals, and retains the effect of moving average. Therefore, MACD indicator has the characteristics of moving average trend, stability and stability, and is a technical analysis indicator used to judge the timing of buying and selling stocks and predict the rise and fall of stock prices.

MACD index is the main technical analysis index of the stock market to analyze and judge the market and predict the short-term trend of the stock price by studying the relationship between EMA, DIF and DEA (or MACD and DEM), the moving average line connected with DIF and DEA, and the bar line drawn by DIF minus DEM. Among them, DIF is the core and DEA is the auxiliary. DIF is the difference between fast smma (EMA 1) and slow smma (EMA2). Bar chart uses the contraction of red column and green column to judge the market in stock market technical software.

Second, the calculation method of MACD index

In the application of MACD, the fast moving average (EMA 1) and slow moving average (EMA2) are calculated first, and these two values are used as the basis to measure the difference (DIF) between them, and then the smma DEA (also called MACD and DEM) line of DIF n period is calculated.