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We continue to talk about the MACD as a trading indicator most used by far, and its signal line. Earlier we said that the MACD is the most abundant 26, 12, 9. L ‘EMA at 26 and 12 times was used, the same we did with the EMA to 12 periods. Remains out of our considerations to the 9 EMA periods, then our signal line.

As we now know, if the moving average in the short and medium term is above the long-term moving average, this indicates a positive trend, as demonstrated recently that prices are rising, and the average short-term is more longer than in the past. But how do we find the momentum of an uptrend? We can do this by comparing if the difference between the average of today and of our reporting period is greater than that normal.


But what does this mean? First, we need to discover our difference normal. It is none other than the “average” in contrast to previous periods. In our case, or 26.12 of the MACD, 9, is the mean of the differences of the last nine periods.

So here’s what we’re going to calculate the MACD:

1. moving averages of prices of the currency pair over 12 periods, say “X”
2. the moving average price of the currency pair over the past 26 periods, say “Y”
3. the difference between X and Y. If it is positive, then there is a sign of a bullish trend, while if it is negative there is a sign of a downtrend
4. the moving average of “XY” for the last 9 times, say “Z”
5. If the MACD line, the one that connects all the dots “XY”, crosses the line “Z”, ie the line that connects all the dots “Z”, then this indicates that the MACD is above the current average of the MACD the last nine periods. This means that the actual difference is larger than the normal difference, which we mentioned above, indicating that the bullish trend is increasing. So, it’s time to buy.

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