Study Guide for Come Into My Trading Room - Forex Factory

106 ANSWERS AND RATING SCALES
MACD-lines is the primary indicator, and MACD-Histogram is derived
from it, tracking the distance between the two lines. Divergences between
peaks and bottoms of MACD-Histogram and prices are among the
strongest signals in technical analysis.
Answer 33
1. F
2. E
3. A-B
4. C-D
5. B
Give yourself a point for each correct answer. Add two points if you got
the bonus question right, or a point for getting it partly right.
Prices fall to a new low A, rally, and then fall to a lower low B, where
MACD-Histogram traces a more shallow bottom. Notice a slight rally
above the centerline between the two lows, “breaking the back of the
bear.” This strong bullish message is reinforced by a tail in point B.
Prices rally to a new high C, pause, and then rise even higher at D, while
MACD-Histogram completes a bearish divergence, rising to a very
shallow top, with a fall below the centerline between the two peaks.
Divergences are the strongest signals of MACD-Histogram, but there are
many more ordinary rises and declines, confirming market moves, not
only in areas E and F, but all over the chart.
At the right edge—bearish. MACD-Histogram is declining, confirming
the downtrend of the EMA.
Answer 34
Phrase 4 does not apply. Give yourself three points for choosing the
correct answer.