Traders trade trends, and no trading software is better at predicting short-term trends than VantagePoint. With its proprietary leading indicators, VantagePoint, leads the industry in trend forecasting. One of its more important and easy-to-use indicators is the Predicted MACD. This leading indicator can help you find and confirm potential trades, the trend changes, which gives you the all-important edge you need to be successful.
The traditional MACD (oving Average onvergence/Divergence) is momentum indicator that charts the difference between two moving averages, generally the 26-day and 12-day exponential moving averages (EMA). A nine-day moving average of the two values forms a “trigger” line, which initiates buy and sell signals when crossing above or below the MACD. The proprietary Predicted MACD in VantagePoint utilizes a 20-day EMA and a 10-day EMA, with a 9-day moving average of the two values as the trigger line to predict trend changes 1-day in advance. VantagePoint utilizes shorter-term EMAs to give a more accurate short-term prediction.
Predicted Trend Reversal Line
When the Predicted MACD line crosses below from the trigger line, this predicts a possible reversal of the current uptrend to a new downtrend. When the Predicted MACD line crosses above the trigger line, this predicts a possible reversal of the current downtrend to a new uptrend. Another crossover indicator occurs when the Predicted MACD crosses above or below a “zero” line, which is the point where the values of the two moving averages that make up the MACD are equal.
Predicted Macd Convergence Divergence
Predicted MACD also defines overbought/oversold conditions in a market when it pulls away from the trigger line, suggesting the price of the market may be due for a correction that will bring the averages back together. Predicted MACD also spots underlying strength or weakness in a market when its movement converges or diverges from the movement of prices.
The normal MACD indicator is a lagging indicator, whereas the proprietary Predicted MACD in VantagePoint is a leading indicator, which means its value lies in forecasting 1-day in advance when a current trend might end or a new trend might begin. As well, the convergence/divergence aspect predicts overbought or oversold conditions within a market, which gives you a “heads up” on a possible trend change as well. As any trader knows, to be successful trading markets, one has to have an edge, and the Predicted MACD in VantagePoint is one of many proprietary tools in VantagePoint that will give you that edge.