[ SEASON 2 | Week 6 ] Steemit Crypto Academy Homework Post for @kouba01 | Cryptocurrency Trading with MACD indicator |
Hello friends .... !!!
Back again with me Ichsan Angga P at Steemit Crypto Academy Homework.
Today I will finish the homework from professor @kouba01.
The topic that I will choose to discuss from the work given by the professor @kouba01 This week's assignment is about Cryptocurrency Trading with MACD indicator
What is the MACD indicator
MACD (Moving Average Convergene Divergence) is a tool or indicator that functions in asset trading, which traders often use the MACD indicator to see the current market trend movement in the asset that they want to trade, which at this MACD we can see the direction of market movements, see the potential for market movements to go up or down and even for a good position where we place the selling price of our assets.
Is the MACD Indicator Good for Trading Cryptocurrencies?
It is clear that MACD (Moving Average Convergene Divergence) is a tool or indicator that helps traders to see the movement of the asset they want to trade, MACD (Moving Average Convergene Divergence) is the same as RSI where they are both tools for analyzing movements crypto world market is going on, and from this analysis crypto coin traders make decisions to sell or buy these crypto assets.
Which is better, MACD or RSI?
We have tried to peel the RSI (Relative Strength Index) about the explanation and function of the RSI, which is a tool used to see the movement of assets that are experiencing an increase or even a decline, and see where the current trend is going, if it appears. the question is whether MACD is superior to RSI ??? we cannot choose which one is superior between the two, because both are used together, any that RSI does not have will be closed by MACD, because if there is something unreadable in RSI, a trader will automatically see the MACD and vice versa. If you know which one is better between the two tools, I say both are equally good, because I can't choose because they both are always used side by side, but on MACD it has an indicator that is easy to read by traders because of MACD. very simple to use the indicators. But MACD has a better advantage because the indicator of MACD is stronger and fades more traders in trading their assets.
How to add the MACD indicator to the chart, what are its settings, and ways to benefit from them? (Screenshot required)
The MACD can be added to all the changes, this time I use the upbit exchange to show the MACD as an indicator reader, as follows.
- Your first step is to open upbit exchange, then here I choose the coin that I reviewed, namely SBD / BTC, after you select the asset that you want to review, you can change it to TradeView, after that you click the indicator as shown below.
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- After that several tool options will appear on the indicator, then you can type MACD as shown below.
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- Then the MACD indicator will appear as shown below
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- Then we will set the MACD indicator to our liking, first you click on settings as shown below.
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- Then a display will appear to set the MACD indicator according to our wishes, in order to get the data we want, as shown below
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- In the picture above there are several settings that we can change such as FastLength, SlowLength, Source, and SignalLength, so I'll try to explain a little so that my friends understand.
1. FastLength
This Fast Length has a task, yes, it will provide an explanation of the expansion of the fast EMA, with the fastest and longest setting which is usually used at 12.
2. SlowLength
SlowLength has its own task, which is where it describes the length of the EMA spread with the slowest time to produce the longest indicator, the setting is usually used in the number 26 which is often used.
3. Source
The source has a definite task where he has information on the indicator regarding the price to be corrected for the calculation, starting from the calculation of the final price, the initial price, the maximum price, the minimum price and other price corrections.
4. SignalLength
SignalLength has a task in which it is responsible for exposing indicators related to the length of the signal line contained in the crypto asset we are reviewing.
It is very important that you understand about MACD, that MACD is calculated starting from the difference between two EMAs of different lengths, we can change all of these values, but if you don't understand and change them wrongly, then you will be confused in analyzing indicators MACD, because you change it a little, the graph that will come out will be faster or even slower, so it will make it difficult for you to analyze.
Prices that occur in crypto assets are very volatile, so we must be traders who can read the position where we must be able to set the MACD indicator with the appropriate settings for the market we want to trade, because if the settings we try to configure or set up our MACD that's wrong, then things like wrong signals or information from the market will also be obtained.
How to use MACD to cross the MACD line and the signal line? And how to use the MACD with the crossing of the zero line?
1. The MACD line crosses the signal line
The following is an example where the MACD line indicator crosses the signal line, with a direction from below to the top, the signal that happens is a Bullish trend, as shown below.
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In the chart that happened above I have said that it is a bullish trend, in which on the chart there is a cross between MACD and the signal line, and the price has increased, because this is a Bullish trend.
2. MACD line intersection with Signal line occurs
This is an example when there is a cross between the MACD line and the signal line that is experiencing a bearish trend where the asset value from above has decreased to the bottom, here is an example
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3. MACD indicator using the middle line
The indicator with the center line is where the MACD indicator is in the middle between positive and negative values, how to read the indicator with the center line is fairly easy, if MACD is more directed towards the positive zone or is in the positive zone above the zero value, then the price will have more upward momentum, whereas if the MACD points or goes negative below its zero value, then the price will have a more intense downward momentum.
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How to detect a trend using the MACD? And how to filter false signals?
MACD is used to analyze zero lines and intersections and intersections of lines, MACD is also often an indicator that provides other information regarding upcoming trends and also the MACD indicator reads future trends in crypto asset trading, so traders must be able to know about signals. -signals given by the MACD indicator, related to false negative signals as well as false positive signals that appear.
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Above is an example of a chart contained in BTC / IDR assets, we can see in the image above that shows a histogram for the asset, where the volume that occurs below the zero line has increased, but on the chart the small peaks have decreased, which is a signal for the price goes up, and this is a good opportunity for traders to buy this asset.
Filter Signal
Traders often change the settings on the MACD indicator to filter signals on the crypto market that will be reviewed, but changing these settings will make it difficult for you, because the crypto market has fluctuating values, if you change the settings wrong There will be readings that lead to false signals that appear, you better use the existing settings, in order to avoid the wrong analysis results due to the settings you changed, but it's a different story if you are already proficient and experienced.
Now let's look at the crypto asset that we are trying to review, let's try to read the movements together where when the histogram gives us a signal about the current trend, we must know and must be able to analyze when signals appear on the histogram, and we must know the next steps we will take, whether we will make a purchase or even we have to make a sale, so try to be brave in making decisions after you analyze the market you want, here is an example.
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How can the MACD indicator be used to extract points or support and resistance levels on the chart? Use an example to explain the strategy.
When using the MACD indicator to perform analysis in drawing conclusions from the resulting resistance bar, it can be said that it is a little easy and requires precision, because as traders in crypto assets we have to see where when the MACD line indicator crosses the signal line, a point will occur. consistent resistance to good conditions, As the asset review below shows
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The results that appear from the histogram which have a value below zero, a support point will occur, and vice versa, the upper MACD line will form a resistance zone, here we can see from the picture above that from the MACD marker indicator we can easily determine variations or trends happened to that trade.
Review the chart of any pair and present the various signals from the MACD
Here is an example that I took, namely the ETH / IDR pair, we will try to analyze some of the signs that appear on the use of the MACD indicator, as shown below
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Let the city try to read some of the signs that are happening to the asset that we are reviewing, here are the signals that appear from these assets
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So the asset we are reviewing is bearish, bullish and there are also some crosses on the histogram from the use of the MACD indicator, which in the histogram the value below zero is marked in red and also has an increase in values above zero, with a green sign. .
Conclusion
The MACD indicator is an indicator that is used as a tool for traders in the crypto world, the MACD indicator is always used in conjunction with or side by side with the RSI, in which the two tools provide information regarding current trends and future trends. When viewed from the point of view of its use, the MACD indicator looks easier to use than the RSI tool, but both of them complement each other in bringing up the analysis results on crypto market charts, so to deepen your knowledge of analytical readings, it would be nice to do it in stages and there is no need to rush to play in this crypto world, because if you use the two tools incorrectly, the MACD and RSI indicators will result in a fatal error when you trade crypto assets.
Last word
So many tasks that I have completed on this occasion regarding Cryptocurrency Trading with MACD indicator, I apologize if my post is still far from perfect and there will be many mistakes, let's fix it together through constructive friends' comments .
Thank you to all of you who have read my post, I hope my post can be useful for all of you.
Regards
@ichsananggap
Note : All of these images are from my screenshots and are the result of my own edits.
Hello @ichsananggap,
Thank you for participating in the 6th Week Crypto Course in its second season and for your efforts to complete the suggested tasks, you deserve a 5/10 rating, according to the following scale:
My review :
Your article contains unconnected ideas, plus you use three different languages.
Sincerely,@kouba01
I'm sorry professor, can I fix it and then the professor checks my assignment again ??? requires hard work to complete the assignment you have given, I am sorry that I mistranslated my language into English proffesor, Thanks