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Macdivergence

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!
Education
by zsamochin
126
Buy opportunity at $150. PT $480Buying zone between $219 (0.5 retracement) and $122.88 (0.854 retracement of the first impulse). Looking at the RSI trajectory and the MACD bearish signal in the weekly we are likely to cross the 200 EMA to $147.35 (0.764 retracement), a zone that has been acting as support and resistance for the past few months. Baidu closed the second retracement of the supercycle in March 2020. Currently consolidating the second wave of the third impulse, which will be the largest, with a target of between $483.5 (1.618 extension) and $562.88 (2 extension) if the bottom of the second wave is confirmed at $147.35. In the event that the bottom of the second wave is at the 0.5 retracement (where we are now), targets would be between $458.37 (1.68) and $522.22 (2). Overview : First buy order (25% of the position) at $190. Second buy order (75% of the position) at $150 Sell orders (depending on the last bottom): between $455 and $562 in the beginning of 2023. +50% annualized profit . Like and subscribe if you liked the idea and want more. Comment with your opinions. Any idea is appreciated. Manage risk properly and don't invest more than you can afford.
NASDAQ:BIDULong
by HumanBias
1
EURJPY Due for a Correction The EURJPY is nearing the upper boundary of the ascending channel, which means that a minor dropdown is likely to occur next. Such a bearish correction does not have to entail a complete trend reversal but merely to act as a minor retracement of the broader uptrend. Even still, contrarian traders could catch a sizable dropdown to one of the next psychologically significant targets - the 23.6 per cent Fibonacci retracement at 130.718 or the 38.2% Fibonacci at 128.988. That is if the price manages to break down below the channel's upper boundary. Notice that the uptrend consists of three major legs (the third one currently being developed). Dropdowns occurred each time that the MACD reached a climax, which is currently being the case. Hence, a bearish crossover at the present rate would likely entail the emergence of another dropdown, which would be inlined with the primary expectations.
Short
by Trendsharks
Interesting times for LTC!Hi all, I've been digging around in TA for a little bit, but of course with the whole crypto space being what it is nobody actually knows what will happen so happy trading and make your own informed decisions! I try to trade by patterns and some TA indicators. This run has been awesome! I am looking to up my LTC holdings through some well timed buys and sells. Currently, I am seeing an opportunity for a sell with a potential buyback within the rising channel. Of course, sometimes we see what we want to see in these charts, so again-- not financial advice. Bearish: I found a bearish RSI and MACD divergence in this run. The past few cycles when RSI has reached this point there has been a major downwards correction. Further, LTC has been trading in these triangle patterns so I am wondering what the downwards leg of this triangle will look like when it comes. Let's see how this pans out! Bullish: ALT SEASON! FOMO Huge run this morning. Rising channel breakout Good luck all
COINBASE:LTCUSDShort
by DZiggie
2
DXY to Continue Showing Strength as it heads towards 95We got in at the bottom and will continue to show conviction as the DXY attempts to back test the old 91-92 resistance zone as support. If successful the DXY should have clearance to rise to 94 and beyond. As of now the DXY is showing 3 layers of hidden bullish divergence on the MACD and 2 on the RSI while forming what looks to be a broadening channel above the 92 resistance area. I expect that this uptrend for the DXY will continue as the US Dollar continues to gain strength and overblown fears of inflation become shattered.
TVC:DXYLong
by RizeSenpai
A bullish case setting up for BKYI Beginning trader and technical/fundamental analyst. This is posted for entertainment purposes only not trading or financial advice. BKYI looking bullish to me. Like these names that are down at the bottom of their range with significant support over time. Could double by just returning to the 50% of previous high a little less than a year ago. Finviz shows low share count, no debt, and some insider transactions. P/S a little higher than I like. Own some of this name already, full disclosure, and looking to add to my position. I'm risking to 0 and not using stops. Believe the company's products will be valuable going forward in the current administration. finviz.com NASDAQ:BKYI
NASDAQ:BKYILong
by Cryptough
EURJPY Neutral status 22/01/2021here we have 2 scenarios of Bullish and bearish, the price action shows a higher chances of bullish rally but at the same time we can see Bearish Divergence on MACD, so we can wait and see or use this chart as a template and apply your analysis and find your confluences with it and choose a side personally I am bearish on it but as I said there are risk on this side too we have specified some Support and Resistance levels where you can target for bearish we can target the intersection of our trend lines which is at 123.66 please comment your opinion for us I apologize for the messy chart... :)
by BitonGroup
2
SPX in a Descending Broadening WedgeEquities are selling off as interest rates on long-term Treasury bonds continue to climb. The SPX has broken out of an ascending parallel channel and is now trading near the top of a descending broadening wedge. If this pattern holds, the SPY could fall below 365 before finding support. The MACD and Stochastic Oscillator confirm this bearish trend: - Weak bearish divergence on the MACD - Stochastic is near overbought condition and falling. Furthermore, the 1h 200 EMA has crossed above the 50 EMA.
AMEX:SPYShort
by otis_bagshots
8