The way spread betters trade or interpret the moving average crossover is they wait for the signal line to cross over the MACD line, simply explained, the 9 EMA (which is the Fast line) cross the 26 EMA(the slower of the two lines). Below is an example of the FTSE 100 Index using the MACD Moving Average Crossover:
The MACD line is created by a 12 EMA moving average and a 26 EMA moving average.
A example of a spread betting strategy is:
Long:
when the MACD Signal Line (9 EMA – green Line) crosses the 26 EMA to the upside.
Short:
when the MACD Signal Line (9 EMA- Blue Line) crosses the 26 EMA to the downside.
The MACD can be used in another two was. That is using the MACD Histogram and using the MACD to spread trade Convergence and Divergence.
Next Page: Spread Trading with the MACD Histogram