MACD

Developed by Gerald Appel,

The Moving Average Convergence/Divergence is one of the simplest, reliable, & most often used technical indicators.

It is a momentum oscillator and also a trend following technical indicator.

Construction

The construction of this trading indicator calculates the difference between 2 moving averages & then plots that as "Fast" line: the second "Signal" line is then calculated from the resulting "Fast" line and then drawn on the same window panel as "Fast" line.

"Fast" line - Blue Line
"Signal" line - Red Line

The "standard" MACD values for "Fast" line is a 12-period exponential moving average and a 26-period exponential moving average MA and a 9-period exponential moving applied to the fast line, this plots the "Signal" line.

FastLine = difference between 12 & 26 exponential MAs moving averages
Signal Line = Moving Average of this difference of 9-periods

MACD indicator - Analysis of MACD Technical Bitcoin Indicator

BTCUSD Analysis and How to Generate Trading Signals

The MACD is commonly used as a trend following indicator ==22==& works most effectively when analyzing trending market movements. Three common methods of using MACD to generate trade signals are:

BTCUSD Crossovers Bitcoin Signals:

FastLine/Signal Line Crossover:

A buy cryptocurrency signal gets generated/derived when the Fast line crosses above Signal line
A sell cryptocurrency signal gets generated/derived when the Fast line crosses below the Signal line.

However, in a strong trending market this cryptocurrency signal gives a lot of whipsaws, the best cross over to use would thus be the Zero Line Crossover Signal that's less prone to whipsaws.

Zero Line Cross over Signals:

When the Fast-line crosses above zero center-line a buy bitcoin signal is generated.
when the Fast-line crosses below zero center-line a sell bitcoin signal is generated.

Divergence Bitcoin Trading:

Looking for divergences between the MACD and bitcoin price can prove very effective in identifying potential reversal &/or bitcoin trend continuation points in bitcoin price movement. There two types of divergences:

Classic Divergence Trade Signals
Hidden Divergence Setup Signals

Overbought/Over-sold Conditions:

MACD indicator is also used to spot potential overbought/oversold conditions in bitcoin price action movements.

These levels and regions are derived & generated if the shorter MACD Lines separate significantly from the median, this is an indication that bitcoin price action is over-extending & it will soon return to more realistic levels.

MACD & Moving Average BTCUSD Crossover Bitcoin Strategy

This btcusd indicator can be combined with other indicators to form a cryptocurrency system. A good combination with the MA crossover strategy. A signal gets derived/generated when both give a signal in same direction.

MACD BTCUSD Indicator Analysis MACD BTCUSD Indicator - Bitcoin MACD Trade Strategies Lesson

Analysis in BTCUSD Crypto Trading

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