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Double Bottom For EUR/USD 4 HourHi Traders, I am looking at this potential Double bottom forming on the 4-hour time frame for EUR/USD We have pure divergence showing on the MACD. We have sellers weakening out on the histogram as well as the MA lines. This current candle needs to close ideally above the neck zone but needs strong bullish volume to accompany it. If we see that, then we can wait for a retracement back into the neck zone before opening up a long position. I have used the trend-based fib extension tool to pre-determine my targets. Target 1 – 1,055 Target 2 – 1, 06 Trade safe out there! The Vortex Trader
Long
by TheVortexTrader
Double Top On EURUSD 4-Hour. Will it play out?Good morning! Today, we are on the EUR/USD pair. We are looking at the 4-Hour time frame. It seems we have a double top at play here. However, I’m not convinced about the neck zone ( Liquidity zone ) We have full (pure) divergence across the MACD. We also have a large bullish volume break-out bar. This could mean that it’s a bull trap and that price will move down further which would be added confluence. However, I want to see further impulse lows closing below the neck zone in its entirety before a retrace up to the top of the neck zone. If this happens then I would short this pair at that point and my targets would be the previous price structure which I’ve shown on the chart. It is a Friday so this could take some time to play out. Either way, it’s one to watch as we can always learn from these patterns. Hope you all have a great weekend and I will be seeing you all on the next one!
Short
by TheVortexTrader
An introduction to the MACD indicatorHere is my quick and dirty introduction/explanation of what the Moving Average Convergence Divergence (MACD) indicator………… indicates. The Moving Average Convergence Divergence (MACD) is a trend following momentum indicator that follows the intimate relationship between a 12-Period EMA and a 26-Period EMA on a price chart in whatever timeframe you are in. The MACD indicator is made up of 6 parts, the MACD Line, the Signal Line, the Histogram, the 0.00 Base Line, the Positive Zone and the Negative Zone. As default, the MACD Line is calculated by subtracting the value of a 26-Period EMA from the value of a 12-Period EMA on your chart to give you your MACD Line value. The MACD indicator will give a MACD Line value in whatever timeframe you are in. The Signal Line is a 9-Period EMA of the MACD Line and is used with the MACD Line to generate/trigger Buy and Sell Signals. If the MACD Line crosses ABOVE the Signal Line, that is considered a Buy Signal. If the MACD Line crosses BELOW the Signal Line, that is considered a Sell Signal. Note that Buy and Sell Signals can be generated in both the Positive and Negative Zones The Histogram is a graphical representation of the distance between the MACD Line and the Signal Line (9-Period EMA). Green Histograms will appear above the 0.00 Base Line when the MACD Line crosses ABOVE the Signal Line. The Green Histograms will Increase in size the further the MACD Line moves upwards & away from its Signal Line. The Green Histogram will also lighten in colour if the MACD Line fails to move higher to create a higher Green Histogram Bar. Red Histograms will appear below the 0.00 Base Line when the MACD Line crosses below the Signal Line. The Red Histograms will increase in size the further the MACD Line moves downwards & away from its Signal Line. The Red Histogram will also lighten in colour if the MACD Line fails to move lower to create a lower Red Histogram Bar. The Positive Zone is the area ABOVE the 0.00 Base Line. If the MACD Line crosses above the 0.00 Base Line, this means that a 12-Period EMA is ABOVE a 26-Period EMA on your price chart in whatever timeframe you are in. So to reiterate, the MACD Line will be ABOVE the 0.00 Base Line when a 12-Period EMA is ABOVE a 26-Period EMA on your price chart. The Negative Zone is the area BELOW the 0.00 Base Line. If the MACD Line crosses below the 0.00 Base Line, this means that a 12-Period EMA is BELOW a 26-Period EMA on your price chart in whatever timeframe you are in. So to reiterate, the MACD Line will be BELOW the 0.00 Base Line when a 12-Period EMA is BELOW a 26-Period EMA on your price chart. Note that the MACD indicator has no upper limit in the Positive Zone and no lower limit in the Negative Zone. The MACD indicator can also be used to show Divergence between the Price and the MACD Line. In a Bullish scenario, if the Price is making Lower Lows and the MACD Line is making Higher Lows then this is potentially Bullish. For a Bearish scenario, if the Price is making Higher Highs and the MACD Line is making Lower Highs then this is potentially Bearish. The MACD indicator can also be used to show Hidden Divergence between the Price and the Histogram. In a Bullish scenario, if the Price is making Higher Lows but the Histogram is making Lower Lows then this is potentially Bullish. For a Bearish scenario, if the Price is making Lower Highs but the Histogram is making Higher Highs then this is potentially Bearish. The MACD can sometimes produce false positive as can be seen here where we have Bullish Divergence with the Price Converging with the MACD Line but no real breakout happened. Note that the MACD Line and Signal Line will be in line with the current Candle Wick in whatever timeframe you are in. The MACD indicator is a lagging indicator but it also has the power to be predictive especially with potential upcoming Buy and Sell signals, divergence and when used with other indicators like Volume, the Ichimoku Cloud, Bollinger Bands, MAs or EMAs, RSI, ADX DI to name but a few as these can help complement the MACD signals to help get a much clearer picture as to what is going on and what may happen on your chart in whatever timeframe you are in, because there is a lot of BS, FUD, FOMO and utter crap out there so a little clarity is always helpful ;-) For me the MACD is a very useful indicator with my trading, so I hope you have found this quick and dirty MACD educational post helpful. Happy trading. Notes: MACD Line = 26-Period EMA Value - 12-Period EMA Value = MACD Line Value Signal Line = 9-Period EMA of the MACD Line. Used with the MACD Line to trigger Buy and Sell Signals Histogram = Distance between the MACD Line and the Signal Line 0.00 Base Line = Crossover point to the Positive Zone and/or Negative Zone Positive Zone = a 12-Period EMA is ABOVE a 26-Period EMA on your price chart Negative Zone = a 12-Period EMA is BELOW a 26-Period EMA on your price chart EMA = Exponential Moving Average.
BITSTAMP:BTCUSDEducation
by entertheroach
2
Idea: How to "wait and see" before jumping into this tradeCurrently watching TSLA because of the hype over Q3 earnings (to be announced). About this setup: - Investment horizon: Medium term (i.e 2 weeks to a month). - Timeframe: Daily chart - Strategy used for backtesting: Mean Reversion (ATR) Strategy Idea: Using Price by Volume Histogram to find current support. Also, we want to mimic the initial point of entry signalled by the Mean Reversion (ATR) Strategy algorithm. Scenario: Price is currently 843; should have entered at 733 following the algorithm. It's too late now, but still waiting to enter the trade. Setup: Using the built-in volume profile tool, set the range starting from the hypothetical point of entry (Sept. 20) extending it up to the current bar (Oct. 15). The red line is the POC developed over time. In theory, it approximates the moving average of price weighted by volume. This arguably provides more meaningful information compared to simple/exponential moving averages because (a) it takes volume into account, and (b) and it sticks to the defined fixed range of period drawn on chart. Other points to note: - 70% of the price distribution is between 762-816 (non-transparent area of histogram); price is currently above, so we assume TSLA is overbought. - the discrepancy between current price and red line is due to lack of volume. If more buyers come in, the histogram will be skewed upward (actually to the left, if looking from correct side), and the red line (POC) will also rise up. - POC has been horizontal at 780 since period of consolidation that began on Sept 28. We define this as the area of support. - POC stands for "point of control", it's the longest bar of the histogram. Stage 1: Do nothing. Just wait. Stage 2: Enter at area of support. - Scenario 1: later, if price rises to 860 (i.e as per 12month target price set by analysts at Goldman) => Tighten your trailing stop loss and/or start taking profits. - Scenario 2: later, if hits stoploss placed below area of support during a selloff => Accept the loss, wouldn't be surprised if we revisit prior supports ranging between 680-720 Other notes: - there are at least 8 analysts covering TSLA; their targets range between 120 to 1200. (Source: NASDAQ ER summary ) We used GS's 860. - this is not an investment advice, it's just a thought process
NASDAQ:TSLALong
by DojiEmoji
1
ETHUSD (4H): Traders in caution modeMarket in last 24hrs ETHUSD remained in consolidation. Lack of trading volume kept the prices bound within a tight range. Today’s Trend analysis ETHUSD could continue to be in the current state as traders appear to be cautious. Any cue of movement in BTCUSD could create a shift in momentum in Ether. Price volatility remained high at approximately 4.7%, with the day's range between $2527.04 — $2705.72. Price at the time of publishing: $2589.44 ETH's market cap: $300.82 Billion However, Indicator summary is giving a 'BUY' signal on ETHUSD . Out of 11 Oscillator indicators, 9 are neutral and 2 are giving a BUY signal. Out of 15 Moving average indicators, 9 are giving a BUY signal. The calmness in the markets could be the calm before the storm. Volumes have remained low in the past 24 hours. ---------------------------------------------------------------------------------------- The analysis is based on signals from 26 technical indicators, out of which 15 are moving averages and the remaining 11 are oscillators. These indicator values are calculated using 4Hr candles. Note: Above analysis would hold true if we do not encounter a sudden jump in trade volume . ---------------------------------------------------------------------------------------- Any feedback and suggestions would help in further improving the analysis!
BITSTAMP:ETHUSDLong
by Mudrex
2
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!
Editors' picks
Education
by zsamochin
126
DJ30 will Fall to 32200 the Upcoming Week - Part 2 (Volume)In addition to the Fibonnacci assessment in the first chart (linked) which shows that we are on a very important resistance level, this chart deals with volume and momentum. Let's break down what's important: Comparative volume profiles of the main trends since 2018. The major trend since March 2020 is broken into 2, separated by the market fall in July last year. This is because the fall I am anticipating pertains to the latter trend first, so it's better to analyze it in separation. RSI shows the momentum and approach of the tipping point. As one can see in the volume profiles, the circled bars are the ones outside the Value Area (70% of tradings volume of the trend). This shows we are in an unfair price already since a while. In addition, they indicate relatively very low volumes amid the uptrend. This was always the behavior before the end of the trend. The POC, indicated by the red line shows the major support level. For the trend since last July, this is around 32200, which confirms my estimation in part 1 through Fibonnacci and trend lines. The POC of the major trend starting from March 2020 (not shown in the chart) is also around the same number, The very last volume profile on the right (very tiny), isolates the past few weeks showing that even in a small time frame, the bull of the last five weeks, at least, is unsustainable. RSI, on its part, shows historically how this market is sensitive to overbuying. As soon as we passed 70 mark since end of 2018, the market always rebounded back. We are around the same level now. FInally, Bollinger Bands are widening, which is an indicator of volatility to come soon.
CAPITALCOM:US30Short
by MontyMacht
3
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.
Education
by ShawnMCR
2
What is a bearish divergence?What is the Moving Average Convergence Divergence (MACD) Indicator? The Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator. The indicator tells us the relationship between two moving averages of the security price. To determine MACD subtract the 26-period exponential moving average from the 12-period exponential moving average. There is a nine-day exponential moving average of the MACD that is used as the "signal line." Whenever MACD crosses the signal line that is an indication to sell or buy. The histogram indicates strength. Dark green means the bulls are stronger. Light green means the bulls are weak. Dark red means the bears are strong. Light red means the bears are weak. The centerline for MACD is 0. What is a bearish divergence? A bearish divergence occurs when the price rise to a new high but the indicator new peak is lower than the previous high peak. Forecastability of the bearish divergence The bearish divergence indicator predicts a bearish future for the stock. However, do not assume a bearish divergence will be bearish all the time. There is an exception: in a strong bull market, the bearish divergence will transform itself and the uptrend may continue. Thank you for reading! Greenfield Remember to click "Like" and "Follow" to see more articles. Disclosure: Article written by Greenfield. A market idea by Greenfield Analysis LLC for educational material only.
NYSE:NIOEducation
by GreenfieldAnalysis
13
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! ---------------------------------------------------------------------------------------- Your questions and comments are most welcome. If you find the post useful, please like, share, and follow to make sure that you get more information once published. - Mudrex
Editors' picks
BITSTAMP:ETHUSDEducation
by Mudrex
21
Nio LongSo it appears I was a bit off in my last call for nio. What I thought was the top, was really just the beginning of a larger move. As much as I would like to do some elaborate analysis, I think this is very simple. There is huge bullish momentum surrounding this stock. Huge. I can see this going all the way up to 33 dollars. On a more technical side, although we see crosses on the macd and an overbought Rsi, we have yet to see any divergence that would indicate a move downwards. I wish you all the best in this trade, and hope you can get in to make money. You'll hear from me again soon.
NYSE:NIO
by Mika_k
1