MACD/Divergence Trading How to Build a Profitable Trading ...
The last time [1] Relative Strength Index (RSI) momentum indicator, [2] Moving Average Convergence/Divergence (MACD) momentum indicator, and [3] Share Price were looking like now...was just before the August pop...
Moving Average Convergence-Divergence (MACD) is the basic Forex indicator. Forex is like swimming. Learn basics before you start real trading. You will lose for sure without basics.
@binance: Moving Average Convergence Divergence (MACD) is one of the most commonly used indicators in the world of trading. Here's why ⤵️ https://t.co/HVK78zMaqT
Forex trading strategies Reddit: ADX and MACD indicators
Forex Trading system that combines ADX and MACD
The ADX and its components the +DI and the -DI, is an indicator of the strength of the trend in the market, which also indicates which is the current prevailing trend - bullish or bearish - so it can be very useful in trend following trading systems like the one we are going to introduce in this article. The MACD was added to provide the buy/sell signals while the ADX serves to confirm the signals generated by the MACD, and together they offer a powerful combination as we will see below. This system was created to trade on a daily time frame, which means it generates medium to long-term signals. As always, it is recommended to test this system on a demo account before using it for real money trading.
System configuration
Currency pairs: All. It can also be tested with precious metals.
Time Frame: Daily.
A candlestick/bar chart.
MACD with the following settings: (3, 9, 16).
16-period ADX with +DI and –DI lines.
System rules
Long signals
The buy signal is provided by the MACD. This signal consists of the bullish crossover of the MACD over the signal line and/or the bullish crossover of the zero line of the indicator.
To confirm the MACD signal, the +DI must be above the –DI. In case the +DI is below the –DI and the MACD generates a buy signal, then the signal must be ignored by the trader who must wait for the bullish cross of the +DI over the –DI to open the trade. buy position.
Stop loss: A stop loss can be placed below the last low.
Short signals
The sell signal is provided by the MACD. This signal consists of the bearish cross of the MACD below the signal line and/or the bearish cross of the zero line of the indicator.
To confirm the MACD signal, the +DI must be below the –DI. In case the +DI is above the –DI and the MACD generates a sell signal, then the signal must be ignored by the trader who must wait for the bearish cross of the +DI below the –DI to open the trade. selling position.
Stop loss: A stop loss can be placed above the last high.
Closing of positions
Close the position if any of the following signals occur:
Buy position: The +DI crosses the -DI downwards, indicating a possible trend change from bullish to bearish. The position can also be closed if the MACD generates a bearish signal.
Sell position: The +DI crosses the –DI upwards, indicating a possible trend change from bearish to bullish. The position can also be closed if the MACD generates a bullish signal.
If the market moves in favor of the trade, a trailing stop can be used to follow the price so that the trader can make the most profit while at the same time protecting the profit generated by the position so far.
System Example Chart
Trading system with MACD and ADX The image above shows a daily chart of the EUUSD with various buy signals generated by this system (white arrows). In all four signals we can see that the price action is bullish and the MACD is above the zero line and has crossed the signal line. Also, the +DI is above the –DI in the ADX, which confirms the signals generated by the indicator. At the last signal, we can see that the market was up hundreds of pips from the hypothetical entry point. MORE:
Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price.
The MACD is a trend-following momentum indicator that assesses market forces and indicates changes in momentum, direction and strength of a price trend. MACD uses moving averages to identify potential trading opportunities near support and resistance levels. The MACD is represented by a histogram and consists of:
The MACD line: it measures the distance between two moving averages, usually exponential moving averages (EMAs).
The signal line: identifies changes in price momentum and triggers bullish and bearish signals.
The Histogram simply plots the difference between the MACD line and signal line and fluctuates in and around the zero designation. The signal line is designated to smooth out the sensitivity of the MACD Line.
Advantages of using the MACD
Due to its reliability and ease, the MACD indicator is a very popular technical indicator that is widely used by most traders and analysts. It has the ability to confirm the strength of a trend as well as signaling the reversal point of the trend. Traders can rely on the MACD to detect bullish and bearish market trends. It is also utilized to confirm the strength of sell and buy signals. On the other hand, the MACD may be less reliable for long-term trading. It is commonly used as a short-term indicator, which means it is best utilized for short-term market analysis. Another downside is that the MACD is lagging or trend following indicator. This means it signals a trend only when it starts, not before. It rather follows the price movement, unlike leading indicators that signal a trend before it happens. Meanwhile, the indicator does not anticipate all reversals and sometimes it can signal false signals especially when the divergence occurs when the price moves sideways. This is commonly known as false positive.
MACD Setup
The Moving Average Convergence and Divergence is available on our Metatrader 4 (MT4) platform alongside the popular and effective technical indicators. Our top-notch trading platform comes with extensive tools for price analysis with a set of in-built technical indicators and charting tools. Trade on the go and keep up-to-date with current market activity from the convenience of your phone or laptop. Open a forex account and get started with a whole kit of technical analysis indicators and tools. On the MT4 platform, click on the Insert tab at the top of your chart, choose Indicators, then Oscillators and click on the MACD. Choose your preferred visualisations for the indicator, then press Ok.
S&P500: THIS IS SO BAD AND COLLAPSE MAYBE IS COMING. Clear bearish divergences in volumen, momentum indicator MFI and lagging indicator MACD in weekly tframe.If price goes down the uptrendchannel it will be a disaster and fibonacci and EMA will give next supports.
BITCOIN: I PREFER TO LOSE THE OPPORTUNITY ( will be more)!THAN TO LOSE MY MONEY ( no more). Bearish divergences everywhere: volumen, mfi, macd, technical indicator, DMI... This looks like FOMO for the ETF and panic due to upcoming crash.I will wait, and hold my cash for one more fall.
EHANG: Technical analysis. Below 200EMA, Below 0782 fibinacci. Over a resistance( red line). MACD and MFI bullish divergence. Not yet confirmed uptrend. I have positions at 54 and 28 usd. Divergences indicates probably will go up soon. More analysis in my r/Docstocks
AUTODESK: STILL THIS BEST 3D SOFTWARE IS NOT A BUY. Broke down uptrendchannel and MFI and MACD bearish divergences indicates it will continue to fall.Wait.
EHANG: THE SIGNAL OF HOPE.Now is doing what i said some weeks ago( see previous post) and i was waiting. The bullish divergence in both, lagging indicator ( MACD) and momentum indicator ( MFI) which is also oversolld.I need macd over zero and over uptrendline.Look for Ichimoku red cloud before enter
TSMC: ACCUMULATION PATTERN SUGGEST TO ENTER .In sideways, you can't follow MACD advices , you look for momentum indicators like MFI and solid timeframes as weekly. Bullish divergences MFI and Acummulation indicator is going up so soon will go up after a 25-30% price retracements. So time to buy .
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![The last time [1] Relative Strength Index (RSI) momentum indicator, [2] Moving Average Convergence/Divergence (MACD) momentum indicator, and [3] Share Price were looking like now...was just before the August pop...](https://preview.redd.it/ed38yo5p9q3a1.jpg?width=640&crop=smart&auto=webp&s=9bb45e6c47b13ed0247cab6ae510d060281e5254 "The last time [1] Relative Strength Index (RSI) momentum indicator, [2] Moving Average Convergence/Divergence (MACD) momentum indicator, and [3] Share Price were looking like now...was just before the August pop...")
