what are you saying is correct - the original statement made in the course, or the observation above that it may be wrong?
(it is wrong!)
that’s true, but it has absolutely nothing at all to do with the question asked above
this forum is absolutely full of incorrect statements about the MACD indicator
it seems to me that there are 4 main reasons for this:-
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there are, unfortunately, (as rightly observed above) some misleading and incorrect statements made about MACD in the site’s education course
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every thread of more than a few posts in which MACD is discussed contains some factually incorrect descriptions and/or explanations of MACD, which have usually been left uncorrected
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the forum’s full of beginners trying to be kind and helpful in advising other beginners, and understandably they make many mistakes and misunderstand quite a bit
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most of the members here use the Metatrader trading platform, which displays the MACD incorrectly, and many people here therefore have a very poor understanding of “what MACD shows and how to use it”, because that’s often where they’ve become familiar with it, and that’s all wrong anyway
let’s see if i can clarify it a bit, in general, first, and then I’ll comment on the specific question asked
general explanation
the MACD indicator displays two lines (not “one line and a histogram” as wrongly shown in Metatrader)
the fast line (also called the “MACD line”) displays the difference between two specified moving averages, without displaying either of the moving averages themselves
the slow line (also confusingly called the “signal line”) is a moving average of the first line - in other words, it’s a moving average of the difference between two other moving averages neither of which is shown
the histogram (if used) is a graphical way of displaying the difference between the fast line and the slow line - in other words it shows the difference between: firstly, the difference between two moving averages neither of which is itself shown, and secondly, a moving average of that difference between two moving averages neither of which is itself shown
the mistake made in the MT platform is that a histogram is shown, but that isn’t what it displays - it’s wrongly used, instead, to display one of the two lines (which is otherwise missing!) - not surprising that that causes plenty of confusion!
so if you need anything described anywhere else in the world, on websites, in courses, in videos, in other forums, or wherever, as “the histogram”, don’t imagine that the one you’re looking at in the MT platform is that histogram - it’s actually something completely different
i hope that helps
to the people who find it very complicated and confusing, i’m sorry about that, but it isn’t my fault: it’s because most of what you’ve been told in the past was mistaken
now let’s answer John Learner’s specific question:-
yes, you’re right - it’s wrong!
specifically, the sentence “they are the moving averages of the DIFFERENCE between two moving averages” is wrong
only one of them (the fast line) is the difference between two moving averages
the other one (the slow line), as explained above, is simply a moving average of the fast line
that’s perfectly true, as far as it goes, but it doesn’t explain what the other line is, so I’d say it’s “true but incomplete”
something else to know about MACD
the “standard settings” are archaic and have absolutely nothing to do with trading forex at all
they date from trading stocks (only) on daily charts (only), from the long-ago days of a 6-day trading week when the stock market was open on Saturdays as well as on weekdays
12 was then the number of trading days in 2 weeks
26 was then the number of trading days in 1 month (a month being 4.3 weeks, on average)
the two moving averages (neither shown itself, as explained above) were designed to display the difference between daily moving averages with 2-weekly and monthly lookback periods - that’s their relevance