Understanding the Moving Average Convergence Divergence (MACD) for Trading Successfully
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Assalam-o-Alaikum Steemians !
I'm @moneyster, a professional level Cryptocurrency investor and an analyser. As usual, today I thought to share another Crypto-related experience with you. I hope this article will be considerably beneficial for all the Steemians in this community
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Moving Average Convergence Divergence is a creative indicator that we can use for identifying market Trends as well as the momentum in the desired Market including Cryptocurrencies. In the Crypto Trading field, we call it as "MACD indicator" shortly. Because this MACD indicator is very popular among all the Crypto Traders.
Basically, this MACD indicator consists of two moving averages. It always compares the difference between those two moving averages for a specific duration. Those are exactly exponential moving averages with the settings of 12 periods and 26 periods. However, the calculation will be accomplished by subtracting 26 from 12 as an average and it is also known as the MACD value.
Mainly we can identify proper trading opportunities using the Crossover of the EMA lines. When the Crossover is joined or crossed together, we will be able to take an entry and compare it with other trading facts.
Additionally, we can use this MACD indicator for identifying divergences in the market in a very effective manner. At the same time, we will be able to identify overbought and oversold levels as a modification of The relative strength index (RSI). At the end of this article, I will briefly guide you on how to use those opportunities practically.
Moving Average Convergence Divergence (MACD) is a very beneficial indicator to identify the trend of the Market in a considered price asset. So, this indicator is a multifunctional indicator as we can use it for identifying both momentum and divergences in the market. Additionally, we can get a clear vision of the present market condition with some important details. Basically, we have the ability to identify the bullish or bearish pressure in the market with help of this MACD indicator. With the help of the divergence identification facility, we will be able to get protection for possible trend reversal points. When we are focusing on a continuous Uptrend or Downtrend market, we can still get many trading opportunities by using relatively lower time frames in conjunction with this MACD indicator. So, the results will be more accurate if we combine them with another supportive indicator.
First of all, I will add this Moving Average Convergence Divergence (MACD) Indicator to my Crypto Chart using the TradingView platform. Then we can go to "Indicators" thought to tool panels and search "MACD" in the giver search bar. Below I have included a screenshot to demonstrate adding the Moving Average Convergence Divergence (MACD) Indicator to our chart.
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Here I have taken an example of a best buying opportunity that I got from the MACD crossover. When the Blue line is crossing above the Yello line, we can get it as a basic buying opportunity. At the same time, we will see the oscillator has been changed to green colour.
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Below is an example of the best selling opportunity that I got from the MACD crossover. When the Blue line is crossing below the Yello line, we can get it as a basic selling opportunity. At the same time, we will see the oscillator has been changed to red colour. It will be better to use a proper stop loss by going through proper risk management methods.
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In this way, we can use this MACD indicator for getting better and easy trading opportunities. However, this is only one trading method and there are a few other trading methods that we can use with this MACD indicator. I will discuss them too in another article soon.
At the same time, we should remember that all the indicators are not efficient completely as nothing we can find 100% efficient in the world. So, we should depend only on this indicator for confirming our trading opportunities.
I have studied the below-sourced articles to further study these topics and I have explained all the above facts in my own words and experience.
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Moving Average Convergence Divergence (MACD) is a great indicator that helps the trader study chart pattern and know when you to enter and exit a trade.
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thank you for teaching us about this, hopefully it will be useful for many people.
You are most welcome brother. And also, I really appreciate for evaluating my articles every day. I hope this article will be also beneficial for you.
This is a really nice strategy.
I learnt something from it.
Thank you very much for your valuable comment. I always try to deliver something more valuable for all the Crypto Traders.
You have an excellent discussion with us about Moving Average Convergence Divergence (MACD). There is a good idea about Moving Average Convergence Divergence (MACD) and it is very useful for trading.
Thank you very much for the detailed comment on my article. It really motivates me to write more such articles.
Thank you for educating us about this; maybe, many people will find it valuable.
You are most welcome brother. Yeah, I think so. I always try to deliver something very important for my fellow steemians here.