Developed by Gerald Appel in the late seventies, the Moving Average Convergence/Divergence oscillator (MACD) is one of the simplest and most effective momentum indicators available. While you don't need to understand the math that underlies the calculation of the MACD trend-lines, by understanding more about how the MACD indicator works, you'll be better positioned to avoid getting fooled by its false signals or lack of signals, such as when the price turns but the MACD doesn't provide any warning.
