MACD (Moving Average Convergence Divergence) – FX Replay Guide

The MACD (Moving Average Convergence Divergence) indicator on FX Replay helps you identify trends, momentum shifts, and potential reversals based on the interaction of moving averages.

How to Use MACD in FX Replay

1. Understand the Core Components:

• MACD Line: Difference between the 12-EMA and 26-EMA.
• Signal Line: 9-period moving average of the MACD line.
• Histogram: Visual difference between MACD and signal line.
• Zero Line: Trend baseline.

2. Common Trade Setups:

• Bullish Signal (Buy):
  • MACD crosses above the signal line.
  • Stronger if also crossing above zero line.
• Bearish Signal (Sell):
  • MACD crosses below the signal line.
  • Stronger if also crossing below zero line.

3. Spot Momentum Changes:

• Watch the MACD histogram for expanding bars (momentum increasing).
• Shrinking bars suggest momentum is fading.

4. Look for Divergence:

• Bullish Divergence: Price makes higher lows, MACD makes lower lows.
• Bearish Divergence: Price makes lower highs, MACD makes higher highs.

5. Backtesting on FX Replay:

• Use Replay Mode to test historical trades based on MACD crossover points.
• Combine MACD with support/resistance zones or volume-based tools like the Imbalance Indicator.

6. Confirmation Tip:

• For more accurate results, combine MACD with trendline breaks, price structure shifts, or other FX Replay custom indicators.

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