In the markets, the macd darts is a tool to determine trend. The more positive the MACD is, the more likely a trend is to be continuing. If the MACD lines cross from one side to the other, the price is expected to follow suit. However, when the lines cross from opposite directions, the trend is unlikely to continue.
Using the MACD to trade on the market can help you find long and short positions. The indicator also helps you spot divergences. Divergences are sudden and unanticipated price rises or falls. They can signal overbought or oversold assets. This indicator is most useful when used in combination with other indicators, such as the Relative Strength Index (RSI).
While the macd darts can signal a potential reversal, it can also signal a false positive. Although it does not predict every reversal, too many false-positives can be a red flag. During a false positive divergence, the MACD will move towards the zero line, as price moves sideways.
A good indicator to use with the MACD is the macd darts histogram. The histogram will show you the distance between the MACD and the signal line. If the histogram is above the short-term moving average, it means a bullish trend is developing. If it is below, it means a bearish trend.
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