MACD

MACD stands for Moving Average Convergence Divergence. Quite a mouthful, huh? You can use this tool to identify MAs (moving averages) that are pointing to the onset of a new trend, be it bullish or bearish. This indicator involves tracing a couple of momentum lines. The MACD line is the difference between two eMAs (exponential moving averages) and the signal line which is an eMA of the difference. If you see a crossover of the MACD and the signal lines, it should be like a warning that a change in the trend is quite probable.

MACD Indicator