The exponential smoothing, similarities, and differences mean line (macd) is developed based on the moving average line. It uses two different speeds (a short-term moving average line with a fast change rate, the exponential smoothing moving average line of a long moving average line with a slow change speed is used to calculate the difference between the two (DIF), which serves as the basis for analyzing and determining the market, then calculate the 9-day smooth moving average line of DIF, that is, the macd line.
The mean of exponential smoothing, similarities and differences (macd) is to use the trend of convergence and separation of the fast and slow moving average to determine the time and signal of buying and selling.
Exponential Smoothing, similarities, and differences (macd) technology analysis, using the DIF line and macd line intersection form the high and low points of the straight line rod and Deviation Phenomenon, as a judgment of the signal to buy or sell, in particular, when the market trend is relatively clear, macd can play its unique functions, but when the market shows a cowhide consolidation pattern and the stock price does not change much, macd trading signals are not obvious.
The exponential smoothing similarities and differences mean line (macd) uses the 12-day moving average line (EMA on the 12-day basis) as the application time and the 26-day moving average line (EMA on the 26-day basis) as the slow moving average line (EMA on the 26-day basis ).
First calculate the value of the two moving average line number, and then calculate the deviation between the two values, the deviation value (DIF) = 12 day EMF-26 EMA. Then, the 9-day EMA value (macd) value is calculated based on the deviation value. Finally, the DIF and macd values are drawn respectively.
According to the staggered analysis method, when the DIF line breaks through the macd Smoothing Line up, it is the confirmation point of the trend, that is, the purchase signal. Otherwise, when the DIF line falls down to the macd Smoothing Line, it is the confirmation point of the decline, that is, the sales signal.
In addition to the medium-term rise or fall, the macd theory can also be used to identify short-term reversal points. Observe the vertical distance between DIF and macd in a straight column. When the straight-line rod changes from large to small, that is, the sales signal, and the straight-line rod increases from small (the maximum number of negative numbers), that is, the purchase signal. As a result, we can determine the short-term reversal point based on the straight rod.
In general, the EMA on the 12th is above the EMA on the 26th, and the positive deviation value (+ DIF) increases. In the decline, the deviation value may change to negative (-DIF), and the negative deviation value also increases. Therefore, when the market starts to reverse, the positive and negative deviation value will decrease. Macd theory uses the intersection of positive and negative deviation values and the 9-day smoothing average as the basis for judging trading signals.
A. Calculation of smoothing Coefficient
The biggest advantage of the exponential smoothing, similarities and differences mean (macd) is the smooth movement of its indicators, especially when the market fluctuates sharply, the smooth movement feature makes it possible to describe price fluctuations relatively slowly, thus improving the practicality of data. Before calculating the EMA, we must first obtain the smoothing coefficient.
B. Exponential mean (EMA) Calculation
Once the smoothing coefficient is obtained, it can be used to calculate the EMA. The formula is as follows:
The average index of the current day = smoothing coefficient * (the index of the current day-the average index of the previous trading day) + the average index of the previous trading day.
C. Calculate the average index value
When you start to record the Index Average continuously, You can regard the closing price or demand index on the first day as the initial value of the index average. To be more accurate, you can average the closing price or demand index of the last few trading days with the average price as the initial value.
In addition, you can use the number of units in the selected cycle as the basic data for calculating the average value.
When DIF and macd are above 0, they are multi-headed markets. When DIF breaks through macd and crosses down, it can only be regarded as a back-to-market, not as the beginning of the short market.
When DIF and macd are below 0, it is a short market. DIF falls below macd and should be sold. For example, if DIF breaks through macd, It is the replenishment of high-end sellers in the rollback process. It can also be seen as a small number of investors trying to connect disks at a low level and is only suitable for short-term operations, fast forward and fast forward.
When the stock price has two or three recent highs and macd has not followed the new highs, you can sell them as appropriate.
In specific use, macd can be used together with RSI (relative strength index) and kdj (Random Index) to make up for their respective shortcomings.
Under normal circumstances, the second downward decline of the high macd will be a big drop, and the second upward crossover of the low macd will rise.
