The MACD (Moving Average Convergence Divergence) indicator is one of the most powerful and popular trading tools offered by the Pocket Option trading platform. You can use this indicator to identify an upcoming trends and reversals.
In this article, I will help you not only identify the upcoming trends and reversals using MACD indicator but will also teach you how you can use them effectively to maximize your trading profit.
Overview
The MACD indicator is a momentum indicator that follows trends, enabling you to identify the upcoming trends and reversals, you can even verify the strength of the trend using the histogram lines.
This indicator also consists of an important component, the histogram. Using it, you can identify the strength of the trend; big spikes represent a strong trend, while small spikes indicate the start of a trend.
Components
The MACD indicator is made from the three major components
1> MACD Line: The MACD Line is the difference between 12 days and 26 days exponential moving average (EMA).
2> Signal line: A 9 day, EMA of MACD line used as a Trigger for buy and sell signals.
3> Histogram: A Histogram line is a series of spikes that oscillates around a zero line with the bigger spikes you can consider a strong trend while with small spikes you can consider a weak trend.
How to install MACD Indicator on Pocket Option?
MACD indicator is a free-to-use tool which means you can use them on a Pocket Option demo account. To install indicator follow the steps below
1> Registration: The first and foremost step is to create a brand new Pocket option account. In case you don't have one click this link. With our link you will get up to a 100% welcome bonus while normally you get only 20%.
2> Login: Once you signed up, log in to your trading dashboard. enter email, password and click login.
3> Trading dashboard: After login, you will redirected to the trading dashboard, next click the indicator button at the top of the page and find the MACD indicator in the list.
4> Configure: You can also configure the indicator based on your trading requirements by configuration I mean change the line colour and histogram colour.
How to find Trends using the MACD Indicator on the Pocket Option?
You can easily find upcoming trends and reversals using the MACD Indicator. As, I said above the MACD indicator is made from two moving average lines when the two lines intersects above the midline it signals a bullish trend
Vice versa, when the two lines intersect below the zero line it signals a bearish trend.
Verify the Trend
You can easily verify the trend using the two intersections of the lines, when the green line or macd line intersects above the red line or signal line it signals a bullish trend
vice versa when the green line or macd line intersects above the red line or signal line it signals a bearish trend.
Verify the Strength of the Trend
You can even verify the strength of the trend with multiple green bars above the zero line verifies a strong bullish trend and vice versa, with multiple red bars above the zero line verifies a strong bearish trend.
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