Avoid MACD pitfall in your trading

[nicolebobbin]

MACD is used quite widely among traders mainly, it would seem, because the basis for the indicator is something they can visualize – effectively measuring the degree of convergence or divergence of two exponential moving averages. Commonly traders will consider buying or selling on crossover of the MACD lines. However, there can be problems and it is worth understanding when these may occur.

Let us take a look at the MACD plot on a weekly chart of USDJPY
Avoid MACD pitfall in your trading

 

[shadowninja]

Thanks for the link. I think it highlights the importance of understanding what an indicator means and not just using it blindly.