Usage of the MACD/OsMA Indicator
The MACD/OsMA indicator consists of three lines:
The Moving Average Convergence/Divergence indicator (MACD) shows the difference between the exponential Moving Averages with the periods of 12 and 26.
The Signal line is the 9-period moving average of the indicator. It helps to define the suitable moments to open a buy or a sell position.
The Moving Average of Oscillator (OsMA) shows the difference between the MACD and its Signal Line.
In a strategy it is reasonable to open a sell position when the MACD falls below its Signal Line (sometimes — when it falls below zero), and to open a buy position when it rises above the Signal Line (or rises above zero).
