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The MACD is a trend following indicator with a built in 'trigger' line to indicate buy and sell opportunities. The MACD tracks the difference between two Exponential Moving averages. a further EMA is calculated on these results giving the trigger line.
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The MACD is primarily used as a buy/sell trigger indicator based on Crossover Events. Usage in a trading plan should take into account the likelihood of being whipsawed in a directionless market. Default values for a typical MACD period values n1,
n2 and n3 are 12 , 26 and 9 respectively. |
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