What is the Full Form of MACD in the Share Market?
The MACD full Form in the Share Market is Moving Average Convergence Divergence. This is one of the most widely used indicators in the technical analysis of the stock market. This indicator makes use of the moving averages of two-time intervals and calculates a momentum oscillator line by deducting the two moving averages, known as divergence.
What does MACD signal?
Stock traders will calculate the MACD by subtracting the 26-period EMA from the 12-period EMA. This calculation creates the MACD line. A nine-day EMA of the MACD is referred to as the signal line, which is plotted on top of the MACD line, and this generally functions as a trigger for buy or sell signals. Investors should buy the security when the MACD line crosses above the signal line. They should sell the security when the MACD line crosses below the signal line.
Advantages of MACD:
The Moving Average Convergence Divergence shows the relationship between the price variations of the two moving averages. It is used to check the strength of the stock and the direction of a trend. It thus assists traders in assessing market momentum and signals for potential buy and sell opportunities through zero-line indications.