The Normalized MACD indicator is a handy tool for traders familiar with the traditional MACD. While it shares many similarities with the standard MACD, there’s a key twist: its values are normalized, meaning they fall into a more predictable range. This predictability allows for easier value-to-value comparisons across different instruments and timeframes.
Now, even though the Normalized MACD closely mirrors the original, don’t be surprised if you notice significant differences in certain market conditions. For instance, during periods of heightened volatility, the traditional MACD can diverge quite a bit from its normalized counterpart. This isn’t just about the values themselves; it also pertains to the slopes and signal lines.
When using the Normalized MACD, stick to the same trading principles you apply with the regular MACD. However, I’d recommend doing a bit of experimenting to see how it performs under different market scenarios. Happy trading!
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