Periodicity.: April - June 2016
e-ISSN......: 2236-269X
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MACD - Analysis of weaknesses of the most powerful technical analysis tool

Sanel Halilbegovic

Abstract


Due to the huge popularization of the stock trading amongst youth, in the recent years more and more of trading and brokerage houses are trying to find a one ‘easy to understand’ tool for the novice traders.  Moving average convergence divergence seems to be the main pick and unfortunately inexperienced traders are relying on this one tool for analysis and trading of various securities.   In this paper, I will investigate the validity of MACD as the ‘magic wand’ when solely used in investment trading decision making.  The main limitation of this study is that it could be used more widely across industries and various sizes of companies, funds, and other trading instruments.

Keywords


Moving average convergence divergence (MACD); Technical Analysis; Signal and Profit relation; Stock Market Trading; Profitability

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References


APPEL, G. (1979) The Moving Average Convergence Divergence Method, Great Neck, NY: Signalert

DHARAMVEER, D. (2014) Technical Analysis of Indian Forex Market, GE-International Journal of Management Research, p. 4-6.

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MURPHY, J. (2004) Intermarket Analysis - Profiting from Global Markets, Wiley Trading

NISON, S. (2001) Japanese Candlestick Charting Techniques, Prentice Hall, p. 81-108.

PRADIPBHAI, N. (2013) Comparison Between Exponential Moving Average Based MACD with Simple Moving Average MACD of Technical Analysis, International Journal of Scientific Research, p. 6-14.

PRING, M. (1995) Investment Psychology Explained, Wiley, p. 45-63.

SHANNON, B. (2008) Technical Analysis Using Multiple Timeframes, LifeVest Publishing Inc., p. 90-108

STOFT, S. (2002) Power System Economics, Wiley/InterScience, p. 54-63.

SOURCE OF GRAPHS: http://bigcharts.marketwatch.com




DOI: http://dx.doi.org/10.14807/ijmp.v7i2.415

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