2.68R EURUSD Target Price 1.23495 (158.0 Pips)EURUSD Entry Price 1.21915 Take Profit 1.23495 (2.68R)
Exponential Moving Average (EMA)
Using the Moving Average Convergence Divergence (MACD)MACD – What it is
The Moving Average Convergence Divergence (MACD) is the momentum indicator that shows the relationship between two different moving averages:
1. The 12 period exponential moving average – On Tradingview it is the Fast Length.
2. The 26 periods exponential moving average –On Tradingview it is the Slow Length.
The MACD line is calculated by subtracting the 26 period EMA from the 12 period EMA.
The Signal line is the 9 period exponential moving average.
These two lines are then plotted on top of each other. These are the two lines you see when you turn on the MACD indicator.
Additionally, there is a histogram that shows the distance between the two lines. Larger bars tell us that the MACD and Signal are further apart.
When it comes to candles, size matters. The larger the candle the more momentum the trend has.
The histogram will turn green when the MACD line is above 0 (bullish) and it will turn red when the MACD line is below 0 (bearish).
Very bearish momentum is shown above. Photo was taken May 23, 2021.
How to use the MACD
The most important thing to know about the MACD is how to read the relationship between the two lines.
I’ve found that the best timeframe to use the MACD with is daily. This is because the MACD is a lagging indicator and using daily data prevents a lot (not all) of false buy and sell signals.
These signals are:
• When the MACD line crosses above the signal line it is a buy signal
• When the MACD line crosses below the signal line it is a sell signal
Additionally, it is best to use the MACD in a trending market; a market with a clearly defined up or down trend.
Using the MACD with trend lines is a very powerful combination.
The reason for this is that if the market is moving sideways, you can see small fluctuations where the MACD and Signal Line cross but the price does not really go anywhere. These are false breakouts.
Therefore, these signals are not automatic buys and sells.
There are ways of confirming the indications from the MACD chart.
One way is a strategy that uses the RSI and MACD together (which is beyond the scope of this text, but I will discuss in my next article).
Another way is to use the MACD with the current trend. So, if you are in an uptrend and then you see a bullish cross, then this is confirmation that you are likely to go higher.
The same is true in reverse.
Also, please note that the cross over happens well after the price either stabilizes or rises. Again, this is because the MACD is a lagging indicator.
Leading Indicator?
Since the MACD and Signal lines are lagging indicators is there something that can be used in a predictive way?
Some traders use the histogram as a way to predict when a reversal will occur.
Since the MACD is a momentum indicator it can show us when sell pressure is alleviating. Meaning it might be a good time to buy.
This doesn’t always work of course, but with good risk management (stop losses) you can often get into a position well before its breakout.
Conversely, it can show you when your long position is running out of steam and can warn you when to get out.
MACD Divergence
Another useful way to use the MACD is to spot divergences.
A bullish divergence, very similar to the RSI, is when the short-term price trend is going down but, the MACD is going up.
Bearish divergence, also very similar to the RSI, is when the price trend is going up but, the MACD is going down.
Trading this way is sometimes not a good idea because you are trading against the trend. Please practice good risk management if you are trading reversals.
Also, notice the buy signal right before the sell signal that is circled. I really want to hammer home the point that the signals are not automatic buys and sells.
Price action is a great way to confirm the reversal (to the up or down side) of a trend. Because simply spotting a divergence does not guarantee the price will follow.
Final thoughts
As you can see there are different ways of successfully using the MACD. I hope I’ve made a few of these ways clear in this beginner guide.
Please let me know if you have any questions and if you like it, please hit the thumbs up and be sure to follow for more.
Links to my Fibonacci Retracement and RSI guides are below.
Thanks for reading!
#NIFTY forming ascending triangle maybewill be looking to buy the dips if we get it, setup valid as long as we don't have any weekly candle close above Resistance
21ema have supported well so far, if we break out from the triangle target will be around 172xx
lets see what we get next few weeks
AUDUSD Target Price 0.75318Wait for the breakout before committing to a short position. Trade in the direction of the breakout. Use a rejection candle as the entry signal.
AUDUSD Target Price 0.80072Wait for the breakout before committing to a long position. Trade in the direction of the breakout. Use a rejection candle as the entry signal.
CertiK CTK breaking out 💪 Certik CTK a midsize market cap with Circulating Supply 4M of 100M is breaking out above both 50 EMA and 100 EMA at the same time after a very long consolidation with increasing bullish volume over the time.
How high will it go? What do you think? Feel free to share your thoughts.
Microsoft hodling the last lineSince the COVID march 23rd sell-off, we have not closed below the 100ema for over 2 days.
There has been 7 successful pullbacks.
Tomorrow we could witness failed breakdown to shake weak hands placing tight stops, so I recommend entering with smaller positions that you usually do.
Fear&Greed index is extremely low, Will 20 weekly EMA save us ?Fear and Greed Index is at extreme fear now at 20, and it will go lower most probably by the close of today. I am longing BTC heavily now with a stop low below 20 Weekly EMA at 45,000 if we close daily below it.
20 Weekly EMA has been supporting BTC for the previous bull market , and with this very low Fear and Greed index , it makes so much sense to buy now. ( Buy with others are fearful , Sell when others are greedy ).
Let me know what you think , Will the 20 weekly EMA save us this time too , or this is the end of bull market ?
NZDJPY New Zealand Dollar Japanese Yen Target 358.2 PipsNZDJPY Measured Move Is 358.2 Pips. Watch For Buying Opportunities Above 79.212. Look for entries inside the EMA 10 EMA 20 area. Look for closing prices inside the Exponential Moving Average area.
Dogecoin/USDollar EMA 10 EMA 20 Pin Bar H4 ChartThe open|close price is beneath the EMA 10 and above the EMA 20. Open|Close Price is in the EMA 10 EMA 20 area. The high price is above the EMA 10 EMA 20. The pin bar is located at a higher low.
DOGEUSD Dogecoin Entry Price near OHLCOn the H4 Chart, the best entry was at the closing price on 18 Apr '21 at 19:00. Wait for the next Pin Bar to occur on the H4 Chart. The Pin Bar to trade should have the Open High Low Close near the EMA 10 EMA 20 values.
DOGEUSD (Dogecoin / US Dollar) DOGEUSD (Dogecoin / US Dollar)
Entry 0.24939000 Closing Price
Target 0.44813000 Previous High Price
Optimal Entry is WHEN the Close Price, Open Price, High Price, and EMA 10 EMA 20 numeric values are close together. Candlestick Bar is a Pin Bar or Rejection Candlestick Bar like a Hammer.
Target Price is previous swing high.
SUGARUSD EMA 10 EMA 20 Pin Bar TradeAfter a break out, wait for the right moment to enter. Don't be in a rush to enter the market. Wait for confirmation of the trade set up. If trade signal does not occur, then do not enter the market.
For SUGARUSD, the confirmation signal occurred on February 4, 2021. See Pin Bar located at the EMA 10 EMA 20. After price breaks a horizontal key level, wait for the trade signal. Price may bounce around the horizontal support resistance key level. The signal may not fall neatly on support resistance level. Remember support resistance levels are areas. Be patient and wait for a signal to form in the area.
ROST in pullbackEma 50 Daily (yellow) will be the first test.
Ema 21 Weekly (white) will be the last.
Will try a swing at those levels or at the recover of the daily 21.
AUDUSD Support Resistance LevelsWatch These Price Levels For A Buy
0.78360 EMA 10
0.78131 EMA 20
0.78182 Horizontal Support Resistance
LTCUSD Litecoin; Pin Bar; EMA 10; EMA 20For Litecoin LTCUSD Trade Idea, Enter Where The Open & Close Is Inside The EMA 10 EMA 20 Area. See Pin Bar At 7 May '21 23:00 as an example.
The Pin Bar Candlestick Price is: 345.86 Open 345.32 Close
When A Pin Bar Forms At Horizontal Support Resistance, Exponential Moving Average Period 10, Exponential Moving Average Period 20; Execute A Buy Order.
