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Macdivergence

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 TradingThroughTheLens
2
BTCUSDT long position in 4h time frameObviously we are in a trading range right now and the price is a little above the support line. However, the sellers are still very active and the supply is overpowering the demand but if the sides change it's safe to say we can open a long position. Also, we see positive divergence in 4h and 1h time frames on MACD and RSI indicators, yet opening any long positions still have highly risky due to lower market cap. looking forward to hear your opinions.
Long
by impressiveHero2001
Bitcoin DivergenceHello everyone Before we start a discussion, it is my pleasure to read your opinion on this post's comment section and support this idea with your likes if you enjoyed it ! BTCUSDT : bitcoin was printing a descending wedge and meanwhile, a divergence between the price and MACD was seen. the price reacted to the very important support zone and then, braked the descending wedge pattern. A short term rising trend is possible. I determine the SL and TP for a good R/R ratio. please remember any analysis can be failed. so, manage your risk and respect your stop loss.
Long
by niktraders
2
How to spot and use MACD DivergencesOscillators Oscillators are any bits of information or data moving back and forth between two points. It is usually used as a signal for a buy or a sell on either side of the range it is moving in. The Relative Strength index which you might hear of is an example of an oscillator, however I will not be going into detail about it as we do not personally do not use it for my trading. When there is a change in momentum, this often signals weakness in a trend. The indicators are designed to signal a possible trend reversal. The only oscillator we use in our trading is the MACD. Moving Average Convergence Divergence. Feel free to look into other indicators, however, we believe that the MACD has been our favourite to use. DIVERGENCE Divergence is simply when we will be looking at the difference in price action against an indicator such as MACD, RSI, Stochastic. The simplest way to put it, when the price is making higher highs the indicator should also be making higher highs, and lower lows then vice versa. If the price is making higher highs but the indicator is not, then the two are diverting from each other and we have divergence. This is a great sign for a weakening trend and a potential shift in momentum. The two types include regular and hidden. Regular divergence When the price is making lower lows (LL), and the oscillator is making higher lows (HL), then we have what we call regular bullish divergence which usually appears at the end of a downtrend. If the price makes a higher high (HH) but the oscillator makes a lower high (LH), then we have regular bearish divergence. This usually occurs at the end of an uptrend. Hidden Divergence Divergence does not necessarily have to show when the trend will reverse, it can show trend continuation, and since we try to avoid trading against the trend this can be of great help. When the price makes a higher high, but the oscillator makes a lower low, we have what we call hidden bullish divergence.   When the price goes to make a lower high but the oscillator makes a higher high, this is what we call hidden bearish divergence. Always remember that in conjunction with these signals, we need other signs in order for us to enter the trade. We cannot solely base our analysis on oscillator divergence, otherwise we can find ourselves on the wrong side of the trade. Wait for the crossovers of the indicators to be sure, this can happen after the price has begun to move, however it can be an assurance that the divergence observed is correct. Always remember if the market is moving sideways, there are no clear indications of divergence so do not force it. Always connect the latest in the price action, meaning if the price is bullish and is retracing, you are looking at higher highs. Focus on the highs and lows of the indicators and ignore any small minor movements in between. Wherever lines are drawn on the price, they have to line up with the oscillator and that is where the line will also have to be drawn, everything has to line up.
BITSTAMP:BTCUSDEducation
by opes_trading_group
4
NFLX Ending Week Above $600Based on these technical indicators, I see Netflix ending the week above $600 per share. MACD shows growing bullish divergence while D+ also shows growing bullish divergence as indicated by the green shadow. The green outline means that is below 40 RSI. Guth 3x Confirm also indicates a buy signal. It has been a volatile market but I personally believe it is a good time to increase your position ahead of earnings. As an options swing trader I plan on buying OTM calls that will expire this week.
NASDAQ:NFLXLong
by Myantman101
Bitcoin channel breakoutHello everyone Before we start a discussion, it is my pleasure to read your opinion on this post's comment section and support this idea with your likes if you enjoyed it ! BTC moved in the ascending channel. the price pattern looked like an ending channel and I waited for downside breakout. Also we see a divergence between the price and MACD. that is another proof for expected downside movement. the price of Bitcoin breaks the parallel channel and I think it is a good opportunity to short BTC. I want to support the idea with USDT.D analysis. USDT dominance shows us investors inclination to change their coins to USDT, and vice versa. As you can see, USDT dominance breaks the descending channel upside and I expect for further rise. this means people change their coins to USDT.
Short
by niktraders
5
NIO could break the downtrend line upwards NIO has been in a decreasing trend since the beginning of the year, which has been confirmed with a couple of bounces. Nevertheless, chances are that the price of these shares break this trend line and starts increasing, having as a first objective attaining $49-50 per share. The MACD indicator is right now pointing upwards, which means that the two lines that provide its signals could cross in the following trading sessions, providing a more clear buying signal to the market. Therefore, we will be waiting for a breakout signal. On the other hand, whether the downtrend continues, a triangle figure could end up being created.
NYSE:NIOLong
by mar_lpz
WISH - Moving in a descending wedge, possibly breaking up soon..Hi Guys, WISH is moving inside a falling wedge in the daily chart. Two third of this wedge is approximately end of January (blue box) where the price might realistically break the red trendline of resistence and reach the 6$. If this will happen, next price targets will be the 9$ gap filling and mostly the 15$ level, which represent the target given by the height of the same descending wedge. In addition to this, MACD on the daily chart is showing a huge bullish divergence which makes pretty realistic an inversion in the upcoming weeks. Not a financial advice, just personal opinion. Do your own due diligence and good luck!
WLong
by FrancescoMerlettini
3
3 White Soldiers Marching to their GravesHello All, Bitcoin is seeing some very bearish signs on the weekly chart. We had just seen 3 white soldiers pattern end with an ATH blow off top and grave stone doji. Historically this has marked the end of a run up. Will it be the same this time? In my opinion, I believe so. We are seeing a lot of bearish divergence on MACD/RSI. As well as bearish price action from 30k to 67k. Yes, we made an ATH but is this run sustainable for longer term growth? I believe not. If 53k does not hold, our macro trend is at risk. As always, be patient, use risk management, and good luck trading.
Short
by RomanXIV
3