{"id":61768,"date":"2013-05-03T10:15:12","date_gmt":"2013-05-03T00:15:12","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2013\/05\/03\/trade-changing-trends-with-macd\/"},"modified":"2013-05-03T10:15:12","modified_gmt":"2013-05-03T00:15:12","slug":"trade-changing-trends-with-macd","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2013\/05\/03\/trade-changing-trends-with-macd\/","title":{"rendered":"Trade Changing Trends With MACD"},"content":{"rendered":"

\n\tBy Walker England, Forex<\/span> Trading Instructor<\/p>\n

\n\tIdentifying and trading changes in the trend can be one of the hardest skills for a trader to master. However, by having knowledge of technical analysis and indicators, traders can successfully navigate a market turn. Today we will focus on analyzing the MACD<\/span> (Moving Average Convergence Divergence) indicator and using it to our benefit in a changing market environment.<\/p>\n

\n\tThe EURGBP<\/span> pictured below, is an excellent example of how MACD<\/span> can be used in such environments. The EURGBP<\/span> has had extended gains moving as much as 1063 pips from its March 2012 low at .7751. At the same time, it should also be noted the pair has also recently turned from its 2013 high and has declined as much as 417 pips. So how can we use MACD<\/span> to navigate this changing market climate?<\/p>\n

\n\t\"\"<\/strong><\/p>\n

\n\tThe first step to trading a market turn is to identify MACD<\/span> Divergence. Divergence normally occurs when the indicator is moving in a different direction from price. Below we can see EURGBP<\/span> forming a higher high, while MACD<\/span> divergence is making a lower high. This is our first indication that price is attempting to turn from the trend. At this point, traders should consider concluding any existing long positions and begin looking for momentum to turn on the pair.<\/p>\n

\n\tNext, traders will use MACD<\/span> to identify what is known as a zero line crossover. The zero line represents momentum for a currency displayed using the MACD<\/span> indicator. When MACD<\/span> moves below the zero line, as in the example below, it indicates that the 12 period EMA<\/span> has moved below the longer 26 period on our graph. This movement will confirm the momentum shift pinpointed by divergence and will allow traders to begin identifying new sell positions.<\/p>\n

\n\t\"\"<\/strong><\/p>\n

\n\tLastly, once divergence and momentum has been identified traders can then look for execution using a classic MACD<\/span> crossover. Traders will look to sell the new downtrend when the red MACD<\/span> line crosses below the blue signal line in a downtrend. Traders can then repeat this approach until markets again diverge and the process can be replicated with the new directional trend.<\/p>\n

\n\t <\/p>\n

\n\tReprinted with permission of the publisher. The above story can be read on the website www.dailyfx.com. The direct link is:<\/em><\/p>\n

\n\thttp:\/\/www.dailyfx.com\/forex<\/span>\/education\/trading_tips\/chart_of_the_day\/2013\/04\/26\/Trade_Changing_Trends_with_MACD.html<\/a><\/p>\n

\n\tThe views expressed are not FNArena's<\/span> (see our disclaimer).<\/em><\/p>\n

\n\tFor real time news and analysis, please visit http:\/\/www.dailyfx.com\/real_time_news<\/em><\/p>\n

\n\tDailyFX<\/span> provides forex<\/span> news on the economic reports and political events that influence the currency market. Learn currency trading with a free practice account and charts from FXCM<\/span>.<\/em><\/p>\n

\n\twww.dailyfx.com<\/em><\/p>\n

\n\tDisclaimer<\/strong><\/em><\/p>\n

\n\tForex<\/span> Capital Markets is headquartered at Financial Square 32 Old Slip, 10th<\/span> Floor, New York, NY 10005 USA.<\/u><\/em><\/p>\n

\n\tTrading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before you decide to trade the foreign exchange products offered by Forex<\/span> Capital Markets, LLC, Forex<\/span> Capital Markets Limited, inclusive of all EU branches, FXCM<\/span> Asia Limited, or FXCM<\/span> Australia Limited, any affiliates of aforementioned firms, or other firms under the FXCM<\/span> group of companies [collectively Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Identifying and trading reversal can be a difficult, but market analysts at FXCM review trading changes in the trend using MACD.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[29],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/61768"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=61768"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/61768\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=61768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=61768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=61768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}