## Traders Toolbox: Moving Average Convergence / Divergence (MACD) MarketClub is known for our "Trade Triangle" technology. However, if you have used other technical analysis indicators previously, you can use a combination of the studies and other techniques in conjunction with the "Trade Triangles" to further confirm trends.

Developed by Gerald Appel, this indicator consists of two lines: a solid line called the MACD line and a solid line called the signal line. The MACD line consists of two exponential moving averages, while the signal line is composed of the MACD line smoothed by another exponential moving average.

To complete the standard calculation of the two lines, you must:

1. Calculate a 12-period exponential moving average of closing prices
2. Calculate a 26-period exponential moving average of closing prices
3. Plot the difference between the two calculations above as a solid line. This is your MACD line.
4. Calculate a nine-period exponential moving average of the MACD line and plot these results as a dashed line. This is your signal line.

MarketClub will do the above calculations for you. The MACD line is represented by a red solid line and the Signal line is represented by a green solid line. The default values for this study are set to the suggest values listed above.

The most useful signals generated from this system occur when the solid red (MACD) line crosses below the green solid line (Signal) and a sell signal occurs when it crosses above the signal line. ---

## Traders Toolbox: Momentum MarketClub is known for our "Trade Triangle" technology. However, if you have used other technical analysis indicators previously, you can use a combination of the studies and other techniques in conjunction with the "Trade Triangles" to further confirm trends.

Momentum measures the change in a commodity's price with time. M = Pc-Pn where M = momentum, Pc = current period's price and Pn = price n periods ago.

The length of time used for the prior period is a matter of personal preference and time horizon of the trader. A narrow window of less than five periods back would be short-term in nature while six to nine periods would be considered intermediate; 10 or more would be a longer time perspective.

The most common value is 10 periods prior. Momentum is positive if today's price is higher than your past period's price and negative if not.

Momentum indicators give their best trading signals when they diverge (go in the opposite direction from prices). There are two types of divergences – bullish and bearish.

Bullish divergence occurs as price falls to a new low while the oscillator refuses to set a new low. This often signals the end of a downtrend.

Conversely, a bearish divergence occurs when price reaches new highs and the indicator doesn't confirm it by also reaching new highs. ---