ALEX trader

📈 MACD Indicator (Moving Average Convergence Divergence)
1. Function:
MACD is a momentum and trend-following indicator that helps traders identify the direction, strength, and potential reversals of a price trend.

2. Key Components:

MACD Line: The difference between the 12-period EMA and the 26-period EMA.

Signal Line: A 9-period EMA of the MACD line.

Histogram: The difference between the MACD line and the Signal line, displayed as vertical bars.

3. How It Works:

When the MACD line crosses above the Signal line, it generates a bullish (buy) signal.

When the MACD line crosses below the Signal line, it generates a bearish (sell) signal.

When the histogram shifts from negative to positive, it suggests increasing bullish momentum, and vice versa.

4. Practical Use:

Identify entry and exit points.

Confirm trends and reversals.

Combine with other tools like RSI, Moving Averages, or support/resistance levels for higher accuracy.

5. Pros & Cons:

✅ Pros: Easy to use, widely available, effective in trending markets.

❌ Cons: Can give late or false signals in sideways/ranging ma