The Moving Average Convergence Divergence (MACD) is a popular technical analysis tool used by traders to identify potential trends in the forex market. The MACD is a momentum indicator that measures the relationship between two exponential moving averages (EMAs) of different time periods. In this article, we will explain how to use the MACD indicator on the FXStreet platform to make profitable trades in the forex market.
Steps to use MACD Forex FXStreet:
1. Open the FXStreet platform
The first step is to open the FXStreet platform on your computer or mobile device. FXStreet is a popular forex trading platform that provides users with real-time market data, news, and analysis. You can create an account on the platform to access its features and tools.
2. Choose a currency pair
Once you log in to the FXStreet platform, you will see a list of currency pairs on the homepage. Choose a currency pair that you want to trade, and click on it to open the chart. You can also use the search bar to find a specific currency pair.
3. Add the MACD indicator
The next step is to add the MACD indicator to the chart. To do this, click on the “Indicators” button on the toolbar and select “Trend.” Then, click on “MACD” to add the indicator to the chart. You can adjust the settings of the MACD indicator by clicking on the “Settings” button.
4. Interpret the MACD indicator
Once the MACD indicator is added to the chart, you can interpret its signals to make trading decisions. The MACD indicator consists of three components: the MACD line, signal line, and histogram.
The MACD line is the difference between the 12-period EMA and the 26-period EMA. It shows the momentum of the currency pair.
The signal line is a 9-period EMA of the MACD line. It acts as a trigger for buy and sell signals.
The histogram is the difference between the MACD line and the signal line. It shows the strength of the trend.
When the MACD line crosses above the signal line, it is a bullish signal, indicating that the price is likely to rise. On the other hand, when the MACD line crosses below the signal line, it is a bearish signal, indicating that the price is likely to fall.
5. Make trading decisions
Based on the signals provided by the MACD indicator, you can make trading decisions. If the MACD line crosses above the signal line, it is a buy signal. You can enter a long position and hold it until the MACD line crosses below the signal line. If the MACD line crosses below the signal line, it is a sell signal. You can enter a short position and hold it until the MACD line crosses above the signal line.
Conclusion
The MACD indicator is a powerful tool that can help traders identify potential trends in the forex market. By adding the MACD indicator to the FXStreet platform, traders can make profitable trades based on its signals. However, it is important to remember that no indicator is 100% accurate, and traders should use the MACD in conjunction with other technical analysis tools and fundamental analysis to make informed trading decisions.
