Leading (Expo) is designed to anticipate future price action, enabling traders to predict market movements ahead of time. The idea of a leading indicator is that traders can get in before the price move happens and ride the entire trend.
It is considered one of the most effective momentum and trend-following oscillators. However, the is based on historical price action, making it a lagging indicator. A lagging indicator usually provides signals or insight once the price movement has passed or is in progress. That is why lagging indicators often are used to confirm a price trend or a move. On the other hand, the histogram is more of a leading feature that can act as a sign of future trend changes.
It takes all advantages of the traditional and converts it into a fast-moving and leading oscillator that provides real-time insights about potential future price moves. As a result, it gives traders time to analyze a possible upcoming price move before it happens and be prepared for what’s coming. However, the leading should be combined with other forms of to confirm potential entries and exits.
Leading vs. Lagging MACD
The leading looks ahead and helps traders prepare for potential price moves. The traditional (lagging) confirms price action that already has happened. A leading indicator reacts quicker to price changes, while a lagging indicator reacts slower. The different types of have their own advantages and drawbacks, so make sure you understand the leading and see if it fits in with your trading strategy.
HOW TO USE
Use the Leading MACD to get insights about potential price changes ahead of time. Get insights about whether a or move is strengthening or weakening. Other common ways are looking for divergences, finding trends, and measuring current momentum.
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