macd trading

# **MACD Trading Strategy**

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

## **1️⃣ Key Components**
✅ **MACD Line:** Difference between the 12-day and 26-day EMA.
✅ **Signal Line:** 9-day EMA of the MACD line (triggers buy/sell signals).
✅ **Histogram:** Shows the gap between MACD and Signal Line (momentum strength).

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

✅ **MACD Divergence:**
🔹 **Bullish Divergence:** Price makes lower lows, MACD makes higher lows → Uptrend reversal.
🔹 **Bearish Divergence:** Price makes higher highs, MACD makes lower highs → Downtrend reversal.

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