MACD Trend Following Strategy- Best Trend Following Strategy

Forex macd indicator strategy

Forex macd indicator strategy

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No more panic, no more doubts. make the right decisions because you've seen it with your trading simulator, TradingSim. Learn About TradingSim That 8767 s right, you should ignore sell signals when the MACD is above zero.

MACD - 5 Profitable Trading Strategies

The divergences can also be used. If the MACD shows something different than the chart, then be alert that something is wrong. This may be the first sign of a trend reversal. It usually helps if you work with trend lines. We can, therefore, set a trend line in the chart and then in the MACD. If the two trend lines point in different directions, there is a divergence.

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Although the MACD indicator consists only of three components (the two lines and the histogram) it can provide a myriad of signals. We recognize six basic signals of the MACD and now we will discuss each of these separately.

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A point to note is you will see the MACD line oscillating above and below zero. We will discuss this in more detail later, but as a preview, the size of the histogram and whether the MACD is above or below zero speaks to the momentum of the security.

How to Use MACD Indicator Strategy in Forex Explained

Furthermore, notice that during our long position, the moving average convergence divergence gives us a few bearish signals. Yet, we hold the long position since the AO is pretty strong. This long position would have brought us a profit of $ per share.

As noted earlier, this situation is classified as a bullish convergence. Therefore, we have a candlestick signal that the reversal may have started, in addition to the MACD bullish convergence.

The MACD is one of the most powerful trend following and momentum indicator. The MACD is a commonly used technical indicator. As stated, the acronym stands for Moving Average Convergence Divergence.

Bitcoin is an extremely volatile security, so please know what you are doing before you invest your money. At any rate, notice how the MACD stayed above the zero line during the entire rally from the low 6555 range all the way above 66,655.

It is important to mention many traders confuse the two lines in the indicator with simple moving averages. Remember, the lines are exponential moving averages and thus will have a greater reaction to the most recent price movement, unlike the SMA.

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