{"id":79492,"date":"2015-10-13T00:50:00","date_gmt":"2015-10-13T04:50:00","guid":{"rendered":"http:\/\/countingpips.com\/?p=79492"},"modified":"2015-10-13T00:50:00","modified_gmt":"2015-10-13T04:50:00","slug":"video-lesson-top-3-technical-tools-part-3-macd","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/10\/video-lesson-top-3-technical-tools-part-3-macd\/","title":{"rendered":"(Video Lesson) Top 3 Technical Tools Part 3: MACD"},"content":{"rendered":"<div id=\"inves-1261933244\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">October 13, 2015<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><h3><span style=\"font-size: small;\">Enhance your trading confidence with this short lesson on how to combine Moving Average Convergence Divergence with other technical tools.<\/span><\/h3>\n<h3 style=\"margin-top: 0px;\"><span style=\"font-size: small;\">By Elliott Wave International<\/span><\/h3>\n<blockquote><p><em>&#8220;Guessing or going by gut instinct won&#8217;t work over the long run. If<br \/>\nyou don&#8217;t have a defined trading methodology, then you don&#8217;t have a way<br \/>\nto know what constitutes a buy or sell signal. Moreover, you can&#8217;t even<br \/>\nconsistently correctly identify the trend.&#8221;<\/em><\/p>\n<p align=\"right\">-Jeffrey Kennedy<\/p>\n<\/blockquote>\n<p>Jeffrey Kennedy is an accomplished teacher and a Senior Analyst here at EWI.<br \/>\nYet he often says that the Wave Principle alone is not a trading methodology.<br \/>\nIt does not tell you how much trading capital you can afford to risk, or specific<br \/>\nguidance about which entry or exit levels are best suited for your trading<br \/>\nstyle or where to set your protective stop.<\/p>\n<p>Kennedy also says that along with risk management and emotional discipline,<br \/>\nthe right technical tools are a vitally important part of supporting your wave<br \/>\ncount.<\/p>\n<p>To enhance trading confidence, Jeffrey&#8217;s 3 favorite technical tools are Japanese<br \/>\ncandlesticks, RSI, and MACD. (read <a href=\"http:\/\/www.elliottwave.com\/freeupdates\/archives\/2013\/02\/20\/Top-3-Technical-Tools-Part-1-Japanese-Candlesticks-.aspx\">Part<br \/>\n1 on Japanese Candlesticks<\/a> and <a href=\"http:\/\/www.elliottwave.com\/freeupdates\/archives\/2013\/02\/25\/(Video)-Top-3-Technical-Tools-Part-2-Relative-Strength-Index-(RSI)-.aspx\">Part<br \/>\n2 on RSI<\/a> ). Today&#8217;s lesson shows you how MACD can help identify trading<br \/>\nopportunities with an example from USDCAD.<\/p>\n<p>This 2-minute video and overview of MACD are adapted from Jeffrey&#8217;s <em>Trader&#8217;s<br \/>\nClassroom<\/em> educational service (which empowers subscribers with information<br \/>\non nearly every aspect of trading).<\/p>\n<blockquote><p><span class=\"LimelightEmbeddedPlayer\"><br \/>\n<script src=\"http:\/\/assets.delvenetworks.com\/player\/embed.js\"><\/script><object id=\"limelight_player_851598\" class=\"LimelightEmbeddedPlayerFlash\" data=\"http:\/\/assets.delvenetworks.com\/player\/loader.swf\" type=\"application\/x-shockwave-flash\" name=\"limelight_player_851598\" width=\"480\" height=\"481\"><param name=\"movie\" value=\"http:\/\/assets.delvenetworks.com\/player\/loader.swf\" \/><param name=\"wmode\" value=\"window\" \/><param name=\"allowScriptAccess\" value=\"always\" \/><param name=\"allowFullScreen\" value=\"true\" \/><param name=\"flashVars\" value=\"playerForm=Player&amp;channelId=fc8d60182efd4f6b814c0d8893fa9450&amp;deepLink=true\" \/><\/object><script>\/\/ <![CDATA[\nLimelightPlayerUtil.initEmbed('limelight_player_851598');\n\/\/ ]]><\/script><br \/>\n<\/span><\/p>\n<p>More from Jeffrey:<\/p>\n<p><em>Moving average convergence divergence (MACD) is a momentum indicator<br \/>\ndeveloped by Gerald Appel. It consists of two exponential moving averages,<br \/>\nthe MACD line and Signal line. The difference between these two lines yields<br \/>\nan additional indicator, MACD Histogram.<\/em><\/p>\n<p><em>Since these studies evaluate momentum, they work optimally in trending<br \/>\nmarkets. When combined with reversal candlestick patterns, MACD and MACD<br \/>\nHistogram can increase confidence in these patterns as well as continuation<br \/>\nof the larger trend.<\/em><\/p>\n<p><em>MACD divergence occurs when prices move one way and MACD moves the<br \/>\nother. Bearish divergence forms when prices make new highs and MACD does<br \/>\nnot. Conversely, new price lows without lower MACD readings is bullish<br \/>\ndivergence. These conditions aid traders in identifying potential changes<br \/>\nin momentum and trend.<\/em><\/p>\n<p><em>MACD is constructed using two lines referred to as the MACD line and<br \/>\nthe Signal line.<\/em><\/p>\n<p><em>When the MACD line appears to penetrate the Signal line, but fails<br \/>\nto do so, a hook forms. The significance of a hook is that it coincides<br \/>\nwith countertrend price moves.<\/em><\/p>\n<p><em>MACD is excellent technical tool provided you know how to use it and<br \/>\nwhat to look for.<\/em><\/p><\/blockquote>\n<hr \/>\n<table class=\"body\" style=\"border: solid 5px #EAEAEA; padding: 10px;\">\n<tbody>\n<tr>\n<td valign=\"top\"><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa562&amp;dy=aa0101215&amp;url=http:\/\/www.elliottwave.com\/club\/trader-education-week\/default.aspx?articleid=3977\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.elliottwave.com\/images\/club\/web_ads\/5669-aq-ewj2.gif\" alt=\"Trading Education Week\" width=\"125\" height=\"150\" align=\"left\" border=\"0\" hspace=\"5\" \/><\/a><\/td>\n<td valign=\"top\">Get more trading lessons from EWI&#8217;s Jeffrey Kennedy:<\/p>\n<p><strong>Announcing Trader Education Week<\/strong><\/p>\n<p>Join us for a FREE trading event that will teach you how to spot trading<br \/>\nopportunities in your charts. Spend this week getting free trading lessons<br \/>\nthat you can apply to your trading immediately &#8212; from one of the world&#8217;s<br \/>\nforemost market technicians, Jeffrey Kennedy.<\/p>\n<p>Whether you are new to trading or have years of experience, you&#8217;ll benefit<br \/>\nfrom Jeffrey&#8217;s easy-to-understand style and clear presentation. He&#8217;ll cover<br \/>\ntopics such as:<\/p>\n<ul>\n<li>Patterns that lead to high-confidence trade setups<\/li>\n<li>Momentum indicators to support your pattern analysis<\/li>\n<li>Japanese candlestick patterns that alert you to a change of trend<\/li>\n<li>How to manage your trades using protective stops<\/li>\n<\/ul>\n<p><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa562&amp;dy=aa0101215&amp;url=http:\/\/www.elliottwave.com\/club\/trader-education-week\/default.aspx?articleid=3977\">Register<br \/>\nnow for your FREE week of trading lessons<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div>\n<p style=\"padding-top: 10px; border-top: solid 1px #CCCCCC;\"><em>This article<br \/>\nwas syndicated by Elliott Wave International and was originally published<br \/>\nunder the headline <a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa562&amp;dy=aa0101215&amp;url=http:\/\/www.elliottwave.com\/freeupdates\/archives\/2015\/09\/30\/(Video)-Top-3-Technical-Tools-Part-3-MACD.aspx\"><strong>(Video Lesson) Top 3 Technical Tools Part 3: MACD<\/strong><\/a>. EWI is the world&#8217;s largest market forecasting<br \/>\nfirm. Its staff of full-time analysts led by Chartered Market Technician<br \/>\nRobert Prechter provides 24-hour-a-day market analysis to institutional<br \/>\nand private investors around the world.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Enhance your trading confidence with this short lesson on how to combine Moving Average Convergence Divergence with other technical tools. By Elliott Wave International &#8220;Guessing or going by gut instinct won&#8217;t work over the long run. If you don&#8217;t have a defined trading methodology, then you don&#8217;t have a way to know what constitutes a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-79492","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/79492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=79492"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/79492\/revisions"}],"predecessor-version":[{"id":79493,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/79492\/revisions\/79493"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=79492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=79492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=79492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}