Trigger Line

AAA

DEFINITION of 'Trigger Line'

A moving-average line found in the moving average convergence divergence (MACD) theory, which is used to signal buy or sell points for a security. The trigger line interacts with the two moving averages that form the MACD line and attempts to predict upcoming trends.

INVESTOPEDIA EXPLAINS 'Trigger Line'

The trigger line provides traders with technical insight on when to long or short a stock. A common use of the trigger line is found in crossovers. When the trigger line crosses above the MACD line, a buy signal is sent, indicating that a trader should purchase the stock. Inversely, the trigger falling below the MACD represents a bearish trend, where the trader should short the stock.

RELATED TERMS
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  2. False Signal

    In technical analysis, a false signal refers to an indication ...
  3. Trade Signal

    A sign, usually based on technical indicators, that it is a good ...
  4. Crossover

    The point on a stock chart when a security and an indicator intersect. ...
  5. Moving Average Convergence Divergence ...

    A trend-following momentum indicator that shows the relationship ...
  6. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
Related Articles
  1. Technical Indicators

    What are the main signals traders use when following Andrew's Pitchfork parallel lines?

    Read about how to draw and interpret price action from Andrew's Pitchfork, including when buy and sell signals are generated from major trendlines.
  2. Trading Strategies

    Momentum Trading With Discipline

    This type of strategy demands controlled decision-making, requiring a continual refinement of entry and exit techniques.
  3. Trading Strategies

    MACD Histogram Helps Determine Trend Changes

    Learn how this momentum indicator is used to determine price action on a stock.
  4. Technical Indicators

    A Primer On The MACD

    Learn to trade in the direction of short-term momentum.
  5. Technical Indicators

    Using Pivot Points For Predictions

    Learn one of the most common methods of finding support and resistance levels.
  6. Forex Education

    Trading The MACD Divergence

    Currency traders can use this method to avoid stop-order triggers before the real reversal.
  7. Forex Education

    Introduction to Types of Trading: Technical Traders

    Learn about the different traders and explore in detail the broader approach that looks to the past to predict the future.
  8. Technical Indicators

    What are some of the most common technical indicators that back up Doji patterns?

    Learn important technical indicators that reinforce a doji candlestick pattern to take advantage of profitable trading opportunities.
  9. Forex Strategies

    How do I use Fibonacci Clusters for creating a forex trading strategy?

    Find out how traders in the forex market can implement Fibonacci cluster analysis with their currency pairs to identify areas of strong support and resistance.
  10. Forex Strategies

    How do I use Moving Average Convergence Divergence (MACD) for creating a forex trading strategy?

    Consider some forex trading strategies that can be designed using the exponential moving average (EMA) lines on the moving average convergence divergence (MACD).

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center