Quick tip: Add a signal line to your indicator, no coding!Want to make your RSI smoother and easier to track and follow its signals? You can add a moving average signal line to it.
Let me share how to do this quickly without coding.
This is a very neat and easy trick you can do - thanks to TradingView :) - using the feature "Indicator-on-indicator"
Quick Steps: add RSI to your chart if its not already there, hover on the RSI indicator label, click the "..." ellipsis, choose the option to "Add Indicator/Strategy on RSI" - it will be the second command from the top on the shortcut menu, and choose your favorite moving average from the indicator library - adjust the MA settings to your preference - and you're done! No coding needed.
maybe, like me, you are experimenting with my recently-published RSS_WMA - aka the Lazy Line 😎 - will add a link below - you can add it to your RSI like i did in the example chart above.
The RSI with the new signal line looks a lot easier to use and trade on, right? The MA Line not only makes RSI more visually appealing, but also makes it easy to follow the RSI movements into OB/OS zones, or crossing the middle line. for "visual folks" like me, this is an improvement that makes a big difference in my trading.
* You can use this same trick with any other indicator / combo of indicators - that would make sense to combine with this approach - in your charts. Get creative.
* Indicator-on-Indicator is an awesome feature - just wanted to share a quick reminder of this trick, as i also forget about it most of the time.
* for more details, there's a comprehensive guide to this feature in TradingView's Help Center
www.tradingview.com
trade safely and good luck!
Signalline
Learn to Read Chart (MACD & XRP)✅ The MACD line is the 12-day Exponential Moving Average (EMA) less the 26-day EMA. Closing prices are used for these moving averages. A 9-day EMA of the MACD line is plotted with the indicator to act as a signal line and identify turns. The MACD Histogram (Below the chart) represents the difference between MACD and its 9-day EMA, the signal line. The histogram is positive when the MACD line is above its signal line and negative when the MACD line is below its signal line.
✅ MACD's formula:
MACD = 12-Period EMA − 26-Period EMA
✅ MACD is often displayed with a histogram which graphs the distance between the MACD and its signal line. If the MACD is above the signal line, the histogram will be above the MACD’s baseline. If the MACD is below its signal line, the histogram will be below the MACD’s baseline. Traders use the MACD’s histogram to identify when bullish or bearish momentum is high.
✅ The box below the chart has 2 lines which alert traders when a crossover happens:
Crossovers are more reliable when they conform to the prevailing trend. If the MACD crosses above its signal line following a brief correction within a longer-term uptrend, it qualifies as bullish confirmation.
If the MACD crosses below its signal line following a brief move higher within a longer-term downtrend, traders would consider that a bearish confirmation.
✅ TradingView lets you use the MACD for fast and easy forecasting. You can find it in Indicators & Strategies (f(x)) above your chart.
Moving Averages Crossover Masterclass Part 1Moving Average Convergence Divergence (MACD)
Created by Gerald Appel
It was designed in order to reveal changes in the direction, strength, momentum, and duration of a trend in a stock’s price
It is a trend-following momentum indicator which shows the relationship between two moving averages of a stock’s price
As the name suggests, MACD is all about the convergence and divergence of two moving averages
Convergence occurs when the moving averages move towards each other while Divergence occurs when the moving averages move away from each other
Three main components of MACD Calculation: MACD line, Signal line, and MACD Histogram
MACD line – Calculated by subtracting 26-day EMA (Exponential Moving Average) from 12-day EMA.
Exponential Moving Average (EMA) is a type of moving average which places a greater weightage on the recent data points when compared to the past data points, making it react more significantly than a simple moving average.
Signal line – 9-day EMA of the MACD line is called the signal line
Histogram – Histogram is the graphical distance between MACD and the signal line, height used to assess how strong the price is moving in the given direction
There are three main parameters of MACD as a whole:
Look-back period of long term EMA to be formulated for MACD
Look-back period of short term EMA to be formulated for MACD
Look-back period of EMA to be formulated for signal line calculation
There are many ways MACD can be used to formulate trading strategy, out of which we will be discussing two in this post:
1. Centerline Crossover
Centerline: Zero lines above and below which the MACD line oscillates, diving the canvas in bullish and bearish regions
Bullish Crossover when MACD line moves above zero i.e. 12-EMA crosses up 26-EMA
Bearish Crossover when MACD line moves below zero i.e. 12-EMA crosses down 26-EMA
Signal Generation
BUY when MACD crosses up 0 while SELL when MACD crosses down 0
2. Signal line crossover
The signal line is 9-day EMA of MACD that means it trails the MACD thereby indicating momentum changes in convergence-divergence
Bullish crossover when MACD turns up and crosses above the signal line
Bearish crossover when MACD turns down and crosses below the signal line
Signal Generation
BUY when MACD crosses up the signal line and SELL when MACD crosses down the signal line
A lot more interesting things can be done using MACD, about which we'll be talking in the next Masterclass on MACD.
STAY TUNED!
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- Mudrex
