MACD
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Trend Trading with MACD
MACD is why we spent time on moving averages earlier. What this tool does is show you when a new trend is likely to be forming. We like trends because trading with the trend is the single best way to make money on the forex market.
The best way to understand it is to see it, so what we’re going to do is take some numbers and plug them in to a MACD chart. Let’s start with the raw data. Here’s a chart of EUR/USD from early in 2007 which we’ll use to generate our numbers.