Traders Glossary

MACD (Moving Average Convergence Divergence)

Definition

Measures the difference between 2 moving averages and is a measure of momentum. As the moving averages drift apart then momentum is increasing and vice versa. Best viewed as a bar chart. Divergence between MACD and price action can indicate a change of trend is imminent.

Related Terms

Blow off Top

A large rise in price followed by a quick drop. Often accompanied with high volume. Usually a technical indicator for the end of a bullish trend.

Divergence

Where 2 or more indicators move in different directions indicating different outcomes.

Fibonacci Retracement

Where prices on a chart move off their latest tops or bottoms in swings of 38%, 50% or 62% from their previous bottoms or tops before resuming their original trend direction. 50% is the most common and easiest to spot.

Traders Glossary

MACD (Moving Average Convergence Divergence)

Definition

Related Terms

Blow off Top

Divergence

Fibonacci Retracement

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