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Oscillators

RSI Crash Course - Why Most People Get REKTHere is a quick crash course on how I use the RSI along with Elliott Waves. - Using the 20, 30, 40, 60, 70, 80 levels within the context of the trend to spot entries - How to spot uptrends and downtrends with support and resistance - How to spot big 3rd wave moves - Using divergences to spot the end of a trend This can be used on any time-frame but I just use it on the daily for this example Like anything in trading, the RSI is more complex than most people first suspect. However, I hope this tutorial simplifies it enough for you to improve your trading P.S. Video cuts out part way into my example, but you get the full tutorial and setup on how I use the RSI Hope you have a great day trading, Tchau
Education
by joshuashepherd877
Double Tops & Bottoms - Advanced Analysis | EducationalNo chart pattern is more common in trading than the double bottom or double top. This pattern appears so often that it alone may serve as proof positive that price action is not as wildly random as many Traders claim. Price charts simply express trader sentiments, demand, and supply, so the double tops and double bottoms represent a retesting of temporary extremes. If prices were truly random, why do they pause so frequently at just those points? To traders, the answer is that many participants are making their stand at those clearly demarcated levels. 1. Double Tops Double tops are a bearish pattern commonly found in uptrends and characterized by two consecutive peaks located at an approximately similar level, separated by a trough. Here we can see a good example of a Double Top in GBP/USD in August 2022, in the recent past. The Price forms a "V shape" as a Double Top, then there is a breakout of the confirmation Line, we can call this also a " Neckline " for a continuation of the price. 2. Double Bottoms Double bottoms are a bullish pattern commonly found in downtrends and characterized by two consecutive troughs located at an approximately similar level, separated by a peak. The Double Bottom is always formed by a V shape, the figure it's just a Mirrored shape of the Double Top. Also for the Double Bottom, there is a breakout confirmation Line. 3. Take Profits For double tops, the take profit is determined from the height Peak to the trough. This measurement will be copied from the confirmation line ( breakout )to below. For double bottoms, the take profit is determined from the lowest trough to the peak. This measurement will be copied from the confirmation line ( breakout ) to the upper.r.
Education
by FOREXN1
25
CSC-HARSI UPdate: Bull Rejection / Bear RejectionWhat's new in this indicator Support and resistance levels have been re-coded to give you a cleaner visualization. as always when you see a support indication you set the support level at the close of the candle. if they cancel this red you place it at the bottom. If the candle is green you place it at the top. You always place the S/R level at the close of the candle. Two other indications added to the script are called, Bull Rejection and Bear Rejection. --Bull rejection shows up when there's a bullish rally and then there's enough resistance to stop that upward move. --Bear rejection is when there's a bearish move and there is enough resistance to stop that downward move. If you get a resistance indication followed by a bullish rejection indication you should exit your trade. Because it's showing you resistance at that level and enough pushing back down. If you get a support indication followed by a bearish rejection you should exit that short trade because it's showing you there is support at that level and enough force pushing to the upside.
Education
by CoffeeshopCrypto
3
The Heiken Ashi Algo Oscillator (Range Trading technique)You're watching this video because you keep getting stop-hunted. You feel like every time you enter a trade to the market it immediately goes the other way and you get this little spike out the top or the bottom of a candle that knocks you out of your position and takes out your stop loss. This is most likely due to Market manipulation on your charts which is making you think that price is moving up or down and instead you have just entered a trade at the beginning of the consolidation or distribution phase. Don't worry you're not alone this happens to a lot of novice and intermediate Traders. I really wish there was an indicator that would tell you as soon as you have entered into a ranging Market but usually you can't tell that until you've looked at your charts for a couple of hours and realize that price hasn't moved above or below a certain number. Well you're in luck because I just finished coating an indicator that will tell you that you have entered into a consolidation or distribution phase at the beginning. In today's video I'm going to show you how to do range trading using the Heiken Ashi Algo Oscillator available for free on Tradingview. Usually after price makes a big rally to the upside or to the downside you can expect that price is going to go into either consolidation or a distribution phase. On your charts this will look like where price runs flat for what could be an extended period of time. The rule of thumb is that after a very strong move to the upside or downside the consolidation period can be lengthy. If there is a short rally to the upside or downside then the consolidation or distribution phase would be a short period of time. So lets get into adding the indicator, and setting up your chart to trade in ranges using alerts from the Heiken Ashi Algo Oscillator. Open up TradingView Go to your indicators tab and search for Heiken Ashi Algo Oscillator and add it to your chart. In the settings make sure you've turned on the following: Range Range Break Long Range Break Short Support Levels Resistance Level There are a number of other alerts available in the Oscillator but we don't need them for this purpose. And as always, use the default settings. When you get a RANGE signal (Which looks like a line between two left and right arrows.) You want to grab your Parallel Channel Tool. You should have already set your support and resistance levels when you opened your chart for the day so look left of your candle. There should be a support or resistance alert right there. On my chart I have a Resistance level. So I'm going to use this line at the top of my parallel Channel Take your parallel channel tool And place it on that support resistance level just left of the candle . I'll drive it far to the right and make sure it's straight and click again. now drag it down to the closest support level and click again. You have just drawn your range. Also on my chart you can see here that I have 1 range indication and then just after it I have a second range indication. When you get a second one you disregard the first one because price has now entered into a new range. What you are looking at is the Centerline of your range. In this particular instance the first Range Line is lower than the second one so to correct this I have to take the top of my parallel Channel and drag it up until the dotted line is at the close of the candle with the new Range signal. do this by driving the top of the box and not changing the bottom of a box. In this case you can see how the bottom of the parallel channel is still sitting on my support and resistance level to the bottom but the top of the parallel Channel is above my support and resistance level And this is fine. The way you use this is by imagining your parallel channel has three levels. Level 1 = The top line Level 2 = The midline Level 3 = The bottom. Also you must respect any Support and Resistance levels traveling THROUGH the Parallel Channel What you are looking for is any candle that closes its majority size across one of these lines here are some examples: Please watch the video for a perfect visualization of how to do this. Directions of Trades in Range Trading. Follow the arrows. You ONLY trade to the INSIDE from the top or bottom of the channel. You also trade either up or down FROM the midline, depending on the majority close of the candle. Again also respect your support or resistance levels when a candle is crossing them.
Education
by CoffeeshopCrypto
7
Unfi Short Scalp using CVD to confirm the trade - 84.86% profit BINANCE:UNFIUSDT BYBIT:UNFIUSDT COINBASE:UNFIUSD Educational post on CVD or Cumulative Volume Delta and how I use it to confirm scalps and swing trades Unfi Short Scalp using CVD to confirm the trade - 84.86% profit in 30 minutes! Delta only shows us market orders. NB!!! Bearish CVD: (used in this trade) Price making LH but CVD making HH. People are aggressively market buying, but highs in price can’t be taken out. Bigger limit order trader has absorbed price Bullish CVD: More people market shorting (CVD) but Price forms HL. CVD makes LL. if price making HL and more people market shorting, then a bigger trader or traders has come in with a limit order and absorbed the market shorts Both leads to trapped traders and you can expect a decent follow through. Not Financial Advice. DYOR. Papertrade before trading with real money. Hope you have a profitable trading day! Shawn
UEducation
by zartraderguy
Explanation/ My observance on the SRSIThis shows off what i've noticed what happens with the Stochastic RSI and price action when it breaks out of a pattern to the upside. Not sure if its always going to happen but i see it on all time frames with a pattern, when price breaks out the stochastic rsi usually gets overbought as price breaks resistancec and when the stochastic rsi comes back down to oversold, price will hold previous resistance as support and if it holds it usually goes higher to the measured move of the pattern.
Education
by davidmarcus1324
2
CSC-HARSI with Alerts for GO long or Short and when to BUYWelcome to the coffee shop everybody I am highly highly highly excited about the new developments taking place with the CoffeeShop Crypto HARSI 2022 Don't let the name of the indicator fool you it can be used on more than just crypto you can use it on all markets or any markets that you choose to use it on. As you know the indicator was released sometime ago and I really want to give a big thank you to all the people who come through Boost the script as well as use it on their charts it's really nice to see you guys doing that and I want to let you know that I get information I get indications of that taking place and I do make sure to follow you because I want to know what it is that you're up to and I want you to see what I'm up to. okay now that we're done with the introductions and all the salutations and make you feel good about yourselfes let's get into what's happening with the CSC-HARSI. Make sure to take a look at the attached video above because you're going to see and hear me discussing the new implementation of 2 types of alerts and indications that show up on the indicator itself. One indication is when it is going to be telling you to Bi-Lo another indication is going to be when it tells you to go long. That is related to people who want to go bullet in the market and Buy Low sell High. "Bi-Lo" Means that the trend is about to reverse or that if you're in a ranging Market you can buy at this very low price. Shortly after that you'll end up getting another indication saying "Go long". This means that you've already bought at the lowest possible price in a safe place and now when it says go long you can set your trade and take profit levels. So "Buy Lo" does not mean enter into the market and set your take profit it simply means that you buy shares at a low price. The other indications that will show up will be simply the reverse of that. One would say "Buy Hi" which means you just accumulate shares or coins or what have you so that you can short them later on. A little while after that you'll get another Indication that says "go Short". This means that you've already accumulated shares at a high value and now you're going to "short" them. In the attached video you'll be able to see how to use the coffee shop crypto and when and how do you use these two separate alerts for example "Bi-Lo" and "Go-Long" or "Buy-Hi" and "Go-Short" As of the recording of this video in the publication of this idea do not look for the information related to that in the coffee shop crypto heart see this is simply an idea to let you know what's coming up next. So in the meantime go ahead add to your favorites from this link and add it to your chart and when I published the new version of the code which will be with somewhere in the next 24 hours I hope you'll get an indication from tradingview and it'll say hey has been an update to this script go and get the new one. At which point you would simply delete the coffee shop crypto from your trading chart, then you would end up going to the Community Scripts and typing in CoffeeShop Crypto 2022 And re-add it to your chart. So again make sure you watch the video that's attached and if you have any questions go ahead and drop them below if you just simply excited about it go ahead link a comment about that below as well.
Education
by CoffeeshopCrypto
10
RSI Trend Strategy GuidelinesThe RSI is a versatile indicator, and can be used to provide entry signals during a trend. To get the signals a moving average is applied to the RSI. 1. Trades are only taken in the direction of the trend. For an uptrend only take longs. For a downtrend only take shorts (puts). 2. During a downtrend the RSI must move above 60 to indicate a pullback. When the RSI crosses back below its moving average (can be at any number, just as long as the RSI is or was above 60 recently) go short. 3. During an uptrend the RSI must move below 40 to indicate a pullback. When the RSI crosses back above its moving average (can be at any number, just as long as the RSI is or was below 40 recently) go long. 4. Give the price at least two or three bars (whatever time frame you are trading on) or more before considering an exit. This gives the price some time to move in your favor.
BINANCE:ETHUSD.PEducation
by yaser_rahmati
Setting Support and resistance levels using the CSC-HARSI 2022Watch the video to get FULL details and listen to some commentary. Always feel free to ask questions below. I love talking with you guys. Here is how we do it: Set your RSI and VWAP as its Moving average in the CSC-HARSI The lower the RSI setting, the more S/R levels you'll find. So don't set your RSI to a low setting on a large timeframe chart. For example: Dont set your RSI to 9 on a 1hr chart. Commonly I trade off of breaks of the 50 period EMA on my chart so i set my RSI to 50 and my chart to 1hr. 1. Setup your RSI to a 50 period length with source as CLOSE 2. RSI MA Settings: Set this to the VWAP (NOTE you can not change the RSI MA length if you set it for VWAP as it is now LOCKED to the RSI length) 3. Look for places on your CSC HARSI where the RSI and VWAP close at exactly the same level. 4. The close must results in a crossover and NOT a bounce. 5. If the Heiken Ashi close was a bullish candle, you mark a horizontal line on your chart ABOVE the candle 5a. If the Heiken Ashi close was a bearish candle, you mark a horizontal line on your chart BELOW the candle.
Education
by CoffeeshopCrypto
1
The worst trading strategy for HARSI or any other indicator.**Not gonna lie. This is a 20+ minute video because I almost lost it, and I went on a RANT! The way I see people just blindly accepting and using ridiculous strategies on indicators is just awful.** I have come across countless TV, YouTube, and other online sourced videos filled with misinformation, and I will make it part of my mission to call out these ridiculous strategies. I just cant sit idlily by while you guys blow your accounts away making bad trades off of horrible information, based from someone who obviously is NOT a real day trader. With that, in todays video, with my brain on fire and my mouth being held back, I am going to cover the strategy I keep seeing here on YouTube. Its one that people claim "The developer told them to use." The strategy is for the original #HARSI (#heikenashi #harsi ) I'm here to tell you, that i have spoken with the original developer a number of times and NOT ONCE did they say this strategy is theirs or that they use it. I'm also going to give you a very quick run through of a proper way to use the new version of the HARSI called the #CSCHARSI or (#coffeshop #Crypto #HARSI ) Download the indicator here: My Tradingview Profile: www.tradingview.com
Education
by CoffeeshopCrypto
12
RSI Overbought & Oversold Strategy What Is the Relative Strength Index (RSI)? 1. The relative strength index (RSI) is a popular momentum oscillator introduced in 1978. 2. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100. 3. An asset is usually considered overbought when the RSI is above 70 and oversold when it is below 30. 4. The RSI line crossing below the overbought line or above the oversold line is often seen by traders as a signal to buy or sell. 5. The RSI works best in trading ranges rather than trending markets.
BINANCE:ETHUSD.PEducation
by yaser_rahmati
Using Momentum Indicator to identify chop zonesIf you are a short term scalper, then chop zones can be your bane and take all your profits. Using the Momentum Indicator, you can identify the propensity for chop zones early by adding some trend lines. The Momentum indicator starts with the assumption that as the chart line moves towards zero, the more choppy and less momentum the market is moving. However, we need some guidelines to identify thresholds above and below zero for choppy areas. Using July 1st as an exemplar, I have plotted chop zones that correlate with the momentum indicator. In this particular case, I added trend lines at 0.15, 0, and -0.15 as prime chop zones. When the indicator is in this range, it is best to wait for breakouts if you are scalping. Try this method on your own charts to identify prime chop zones and tweak it if necessary. However, I plan on using these chop thresholds going forward.
NASDAQ:TQQQEducation
by dratzlogic
2
Price Action Ranges| Range High/Low| Deviations In this segment we will discuss the concept behind Price Action Ranges; they are periods of oscillation in the market where supply and demand is balanced. Once this occurs, there is a high probability of a price expansion out of the range. The basic concepts in price action ranges are the following: - Range High Resistance - Range Low Support - Range –Mid - Deviations Range High Resistance - This is an area on the chart where resistance is present, price action tests this area before reversing back down Range Low Support - This is an area on the chart where support is present, price action visits this area for a test before reversing back up Deviations - Deviations occur out of the region to generate liquidity, it is designed to trap trader before reversing in the opposite direction.
Education
by AzizKhanZamani
Why trading with simple indicators for beginners is a bad idea. Hello, An idea that may strike some sense to "divergence" trading, and why you should not be trading reversals, when you are a beginner trader. There are about 5 divergences, indicating reversals inside this STRONG BULL TREND. And you could make money buying anywhere in the trend with a wide stop. Instead beginners are taught to trade reversal because they are "HIGH R/R". Yes, they are HIGH RISK, HIGH REWARD. Not LOW RISK HIGH REWARD. The idea that a HIGH RISK TO REWARD RATIO is good, is so misunderstood in the trading community. Low risk, high reward DOES NOT EXIST in trading. There are more components to trades than just the P&L. There is also a thing called PROBABILITY. High risk, low reward means HIGH PROBABILITY. Low risk, high reward means VERY LOW probability. The reason is simple: There has to be an institution taking the OTHER side of YOUR trade, in order for you to make money. When shorting a bull trend you can ONLY expect to make SCALPS. Do not get into the rabbit hole of burning through you capital, hoping for reversals. You don't have enough capital to keep shorting the upside. Just go long, when trends like this occur. Stop looking for reversals, get into a SMALL position and keep adding as it is going up. Best to you, traders. Have a wonderful rest of the week.
Education
by TheContrarianBull
🔥 Very unique situation is happening for the DYDX 🔥Hello traders 🐺 . As you saw in the title , in this idea I want to talk about this unique situation of the DYDX which in my opinion is very rare and unique in the market specially in the higher time frame like daily and weekly so this could be a very special and profitable trade for you my friends 🚀🔥 . Many of you know about the bullish and bearish divergence and also may know that what this divergence and patterns trying to telling to us ; but there are some traders whos still don't know about this patterns , so I decided to publish this idea and talk more about the bullish and bearish divergence and also talk about the wedge pattern , so this is tutorial content and I hope this be helpful for you my dear friends . wedge patterns : What we have currently in above chart is falling wedge pattern , which is bullishly bias pattern but what does this means ? when we look at the wedge patterns which in this case is falling wedge or broadening channel , we see descending trend lines which are diverging each others , so we can see a something look like channel but the channel trend lines in the wedge patterns are diverging each others . But the important point about the wedge patterns is the story behind them , usually when we have a wedge patterns in the market , if you realize the pattern correctly in the most cased we have a divergence in the RSI , but what does this means for us ? Wedge patterns are type of the exhausting pattern and this means that during this patterns , bigger operator of the market are trying to change the trend but they want to accumulate or distribute during the pattern and we could realize it in the RSI value , because for example in this case we have a falling wedge pattern and as you can see in the chart above we have lower lows in the chart but in the RSI we have a higher lows ; you can see that as price start to drop , RSI start to rise during the pattern and this means that they are accumulating in the lower price but they do it slowly and want to exhaust people from the current situation of the market so they do it slowly and didn't push the price in one single move , because in that case they can't buy any more in this lower prices . ok guys I hope this tutorial be helpful for you , but I think now it's time to talk about the DYDX situation . As you can see in the chart , we have the exact same thing for DYDX , and in my opinion this is a very unique situation in the market because this pattern is formed in the higher time frame like daily or weekly . because of the type of this idea I can't talk more about the price targets because this is a tutorial idea and in this type of idea we have to educate people , not talk about the price targets or long and short trades , so make sure to follow me to see my next analysis about DYDX .
Education
by Kiu_Coin
5
HOW-TO: Cycle analysis helps to detect important turning pointsThe concept of cycle analysis has enourmous power to detect and project important points in time when markets might turn. Cycles work in the time domain and therefore offer additional value to technical analysis. As technical analysis is mainly driven by price, cycle analysis offers a view on another parameter: Time. The most important situations occur when time-based cycle projects come into alignment with price-based technical analysis. Therefore, every trader and analyst should also pay attention to time-based cycle analysis. My objective is to offer tools and improved technical indicators on this platform to combine cycle analysis with technical analysis to help in detecting important turning point. This idea is a summary and real-case example on how time-based cycles gave us the exact pre-information on the expected market top during the period October 2021 to 2022. All has been freely avaiable to the public without any need for subscribtion. Check the signature link. Time-based analysis requires additional tools which are not available directly on TradingView yet. Therefore we must reference additional tools to detect relevant cycles. The public announcements based on time-based cycle analysis on the global markets are labled on the chart "Weekly Cycles Rolling Over" (Oct.2021) and "The Calm before the next Wave" (Jan.2022). Look for "The clam before the next wave" via the signature link. They are freely available for your review and have been posted in advance. We will continue to bring more and more of our cycle tools directly to the TV platform, as Pine will allow us to do so. Once you know the dominant cycle (length), you can use this information to improve your technical analysis on the price chart. I do provide different free indicators here on the TradingView platform which are free to use in your own analysis. Please see the linked related ideas which provide access to these indicators for your own free usage. The key is do use the known dominant cycle as input for these indicators. Once the "correct" input is given - these indicators will reduce noise and will make the turns visible on the price chart. The following example is using one of the indicators available here on the TradingView platform. The cyclic tuned RSI indicator: 1) The first indicator signal occured already in May 2021 when to signal line crossed below the dynamic upper band of the cyclic smoothed RSI indicator. While the weekly cRSI is also overbought, indicated by the red background. However, this technical signal occured not in the projected timing window which was given by the dominant cycles. The cycles still have been in their upswing phase on the weekly and daily cycles. So at point (1) we had a technical sell signal. Which was not confirmed by time-based cycles. Time and price have not come into alignment. 2) The second indicator signal (sell) occured in November 2021. When the signal line touched the upper band and reversed, while the weekly cycles have been in overbought situation (red background). This time now is different because the time-based cycles have rolled over! The upswing cycle phase has ended. This was published based on the the time-based cycle analysis "Weekly S&P500 cycles rolling over" on October 2021. So now we have an alignment of the technical cyclic tuned indicator and confirmed by the weekly cycles which have rolled over now indicating a time-based top. Price and time based cycles have come into alignment. There is no misinterpretation possible. There are no other sell signals or buy signals following this method. A clear top/sell signal in November 2021, after the time-based cycle analysis was published in October 2021. 3) The third indicator signals (sell) occured around 12. Jan. 2022, once the divergence between price and the indicator top has become visible. This price cycle signal (divergence) was supported by the time-based cycle analysis published on 18th January, labled "the calm before the next wave". This time, again daily time-based cycles and price cycles from the shown indicator have come into alignment. Again a clear signal that after the weekly cycles (see #2) now the daily cycles have joined the bearish camp confirmed by the divergence signal at the same time on the price chart. Thats how you can use cycles to improve your trading skills. Join the livestream to discuss the analysis and how it can be used on the TradingView chart: www.tradingview.com
Editors' picks
XETR:DAXEducation
by StockMarketCycles
24
RSI tipI've mentioned before how RSI only uses closing price to plot its line. This means you have to wait for price to close before the final value of the RSI is valid. A trap I've fallen into is using RSI data that isn't complete. Let me give a few examples. This weekly chart looks promising. Bullish candle and RSI increasing. A few days later after the weekly candle actually closes, not so much. Same situation happening yesterday. And now today. Obviously the weekly candle has yet to close so we can't draw any conclusions. Just wanted to point this out since it happens on all time frame.
COINBASE:BTCUSDEducation
by variousCryptos
Automated Trading with Trailing Take Profit and Scaling ExitsAutomated Trading on Tradingview can be challenging. But with some strategies employing smart trading techniques, you can find your way to a reliable setup. There are many aspects of automated trading I've employed and studied. Those are as follows: Trailing Take Profits: Allowing a trade to surpass the original profit target if the price continues in your favor, followed by an offset value. Stop On Close: Waiting for a trade to close a bar below your stop loss before exiting a trade. Scaling Exits: Exiting a partial position at a set limit price between the entry and final take profit target. More info available on the chart.
Education
by PrismBot
1
FB waited Long positionFB stock repeating July 2018 pattern. Expect price to further decrease until it increases. The difference here is that MACD has already crossed over into bearish territory. Stochastics has moved into oversold territory and weakness in the trend shown by the RSI is looking oversold. RSI signal line of 41 is still in range between 50 and 20. This shows that there is room for the stock to further dip. Either wait for 6 months to get a bullish candle with confirmation candles to enter the trade (approximately July 2022). If taking a long-term position (greater than 1 year) and it's ok to take a temporary drawdown or to dollar cost average, it is a good buy right now. Otherwise, it's better to wait till July and see if the price starts appreciating again as an entry trade. Risk Disclaimer *Futures, stocks, exchange traded funds and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures , stocks, and forex markets.
NASDAQ:METAEducation
by ashpat86
3
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