NQ Futures MACD Crossover Analysis
Introduction
The MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA.
Bullish Signal: When the MACD line crosses above the signal line.
Bearish Signal: When the MACD line crosses below the signal line.
How to Interpret MACD Crossovers
Bullish Crossover (Buy Signal)
When the MACD line (blue) crosses above the signal line (orange), it indicates bullish momentum. Traders often consider this a buying opportunity, especially when the crossover occurs below the zero line.
Bearish Crossover (Sell Signal)
When the MACD line crosses below the signal line, it indicates bearish momentum. This is often considered a selling opportunity, particularly when the crossover occurs above the zero line.
Histogram
The histogram represents the distance between the MACD line and the signal line. When the histogram is positive (green bars), the MACD line is above the signal line, indicating bullish momentum. When negative (red bars), the MACD line is below the signal line, indicating bearish momentum.