MACD Trend Following Strategy PDF
MACD and Moving Average Strategy
Since the MACD indicator uses 26 and 12 Exponential Moving Average to draw the MACD indicator lines, we shall compare these two EMAs with the MACD bitcoin trend following technical indicator to determine how these buy & sell bitcoin signals are generated and how the MACD indicator can be used to generate trend following signals.
MACD Cryptocurrency Indicator - MACD Trend Following Trading Strategies - MACD Bitcoin Indicator Strategy - MACD and Moving Average Strategy
The MACD indicator is a trend following technical indicator meaning it generates bitcoin trading signals that are leading compared to lagging indicators that lag behind the bitcoin price.
Buy BTCUSD Trade
A buy bitcoin trade is generated when there is a MACD fast line crosses above the signal line - this shows that there is an upward cryptocurrency trend. However, as with any leading bitcoin indicator these cryptocurrency signals are prone to whipsaws/fake-out signals.
To eliminate the bitcoin whipsaws it is good to wait for confirmation bitcoin trading signals of the buy bitcoin signals. The confirmation bitcoin signal is when the two MACD indicator lines cross above the zero line mark, when this happens the buy cryptocurrency signal generated is a reliable bitcoin trading signal.
In the cryptocurrency trading example illustrated below, the Moving average cryptocurrency indicator generated a buy bitcoin signal, before the bitcoin price started to move up. But it wasn 't until the MACD indicator moved above the zero line that the buy bitcoin signal was confirmed, and the Moving Averages also gave an upward crossover crypto signal. From experience it's always good to buy after both the MACD indicator lines move above zero center line mark - which shows there is an upward cryptocurrency trend.
Where to Buy using MACD Cryptocurrency Indicator - MACD and Moving Average Strategy
Sell Bitcoin Trade
A sell cryptocurrency signal is generated when there is a MACD fast line crosses below signal line. However, just like the buy bitcoin signal, these are also prone to whipsaws/ fake outs.
To eliminate the whipsaws it's good to wait for confirmation of the sell crypto signal. The confirmation is when two lines cross below zero mark, when this happens the sell generated is a reliable bitcoin trading signal.
In the cryptocurrency trading example illustrated below, the Moving average generated a sell confirmed after MACD moved below the zero line at the same time that the Moving Averages gave a crossover bitcoin trading signal.
Where to Sell - MACD & Moving Average Bitcoin Strategy - Using MACD Cryptocurrency Indicator - Sell Trading Signal
