You can see that the MACD follows the momentum of the market very well. It rises as the market rises and falls as the market falls. We labeled just two signals to show this example.
The first one is a long signal that was generated when the MACD line rose above the signal line, far below the zero level. You can see the price bar where a trade would have been entered. By the time the MACD turned below the signal line after rising far above the zero level (a short signal), a lot of profit would have been made. Even the short signal produced a good price decline from the end of August to the beginning of October.
