MACD Divergence

Using the MACD Indicator to Determine Market Trend – part II

Dr. Thomas Carr

divergenceThe MACD, or “Moving Average Convergence Divergence,” is an extremely popular technical indicator.  As I explained in my previous article HERE, MACD uses two exponential moving averages to render a visual picture of times when those moving averages are either converging on each other or diverging from each other.  The changing posture of these two moving averages relative to each other, either converging or diverging, and of that posture relative to its own exponential moving average – called the “signal line” – gives the market technician information that can be used in rendering judgments about where the security might be heading in the near future.

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Tom
Dr. Thomas K. Carr (aka “Dr Stoxx”) is the Founder and CEO of DrStoxx.com which publishes 4 market letters every week, in addition to offering trader education and coaching services. Dr. Carr holds a D.Phil. degree from the University of Oxford and a Masters from Princeton. For 17 years he was a tenured professor to undergraduate students. He currently is a fulltime trader, market analyst, trading systems developer, and trainer of traders. The management company he founded, Kingdom Capital, trades accounts for private clients.

Dr. Carr is author of three bestselling trading books including, Trend Trading for a Living (McGraw-Hill, 2007), which has sold over 50,000 copies, with translations in Chinese, Japanese and Korean. Dr. Carr’s insights into the markets have been published in The Wall Street Journal, US News and World Report, Investors Business Daily, and Technical Analysis of Stocks and Commodities.

Tom

Dr. Thomas K. Carr (aka “Dr Stoxx”) is the Founder and CEO of DrStoxx.com which publishes 4 market letters every week, in addition to offering trader education and coaching services. Dr. Carr holds a D.Phil. degree from the University of Oxford and a Masters from Princeton. For 17 years he was a tenured professor to undergraduate students. He currently is a fulltime trader, market analyst, trading systems developer, and trainer of traders. The management company he founded, Kingdom Capital, trades accounts for private clients. Dr. Carr is author of three bestselling trading books including, Trend Trading for a Living (McGraw-Hill, 2007), which has sold over 50,000 copies, with translations in Chinese, Japanese and Korean. Dr. Carr’s insights into the markets have been published in The Wall Street Journal, US News and World Report, Investors Business Daily, and Technical Analysis of Stocks and Commodities.

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