Wise Investing

M A C D   M oving   A verage   C onvergence   D ivergence. This technical indicator is a tool that’s used to identify moving averages that are indicating a new trend, whether it’s bullish or bearish. After all, a top priority in trading is being able to  find a trend , because that is where the most money is made. With a MACD chart, you will usually see three numbers that are used for its settings. The first is the number of periods that are used to calculate the  faster-moving average . The second is the number of periods that are used in the  slower moving average . And the third is the number of bars that are used to calculate  the moving average of the  difference  between the faster and slower moving averages . For example, if you were to see “ 12, 26, 9 ” as the MACD parameters (which is usually the default setting for most charting software), this is how you would interpret it: The  12  represents a moving average of the previous 12 bars. The  26  represents a moving average of