MACD trading

# **MACD Trading Strategy**

MACD (**Moving Average Convergence Divergence**) is a powerful momentum indicator used to identify **trend strength, reversals, and entry-exit points** in trading.

## **1️⃣ Key Components of MACD**
✅ **MACD Line:** Difference between the 12-day and 26-day EMA.
✅ **Signal Line:** 9-day EMA of the MACD line, used for trade signals.
✅ **Histogram:** Represents the gap between the MACD and Signal line.

## **2️⃣ MACD Trading Strategies**
✅ **MACD Crossover:**
🔹 **Bullish Signal:** MACD crosses above the Signal Line → Buy.
🔹 **Bearish Signal:** MACD crosses below the Signal Line → Sell.

✅ **MACD Divergence:**
🔹 **Bullish Divergence:** Price makes lower lows, but MACD forms higher lows → Reversal Up.
🔹 **Bearish Divergence:** Price makes higher highs, but MACD forms lower highs → Reversal Down.

✅ **MACD Histogram Analysis:**
🔹 Expanding bars indicate **strong momentum**, while shrinking bars signal **trend weakening**.

### **Conclusion**
MACD is a reliable tool for **trend confirmation and momentum analysis**. Combining it with **support-resistance and volume analysis** enhances trade accuracy. 🚀