MACD Commodity Trading Strategy Tutorials Tutorial
MACD Trend Following Trading Strategies
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 commodity trend following technical indicator to determine how these buy and sell signals are generated and how the MACD indicator can be used to generate trend following signals.
MACD Commodities Indicator - MACD Trend Following Strategies - MACD Commodity Trading Indicator Strategy - MACD and Moving Average Strategy
The MACD indicator is a trend following technical indicator meaning it generates commodity trading signals that are leading compared to lagging indicators that lag behind the commodity price.
MACD Trend Following Trading Strategies in Upward Commodity Trading Trend
A buy commodity trade is generated when there is a MACD fast line crosses above the signal line - this shows that there is an upward commodities trend. However, as with any leading commodity indicator these commodity signals are prone to whipsaws/fake-out signals.
To eliminate the commodity whipsaws it is good to wait for confirmation signals of the buy signals. The confirmation commodity signal is when the two MACD indicator lines cross above the zero line mark, when this happens the buy signal generated is a reliable commodity signal.
In the commodities trading example shown below, the Moving average commodity indicator generated a buy signal, before the commodity price started to move up. But it wasn 't until the MACD indicator moved above the zero line that the buy signal was confirmed, and the Moving Averages also gave an upward crossover commodity 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 commodities trend.
Where to Buy using MACD Commodities Technical Indicator - Buy Commodities Trading Signal - MACD and Moving Average Strategy
Sell Commodity Trade
A sell signal is generated when there is a MACD fast line crosses below signal line. However, just like the buy signal, these are also prone to whipsaws/ fake outs.
To eliminate the whipsaws it is good to wait for confirmation of the sell signal. The confirmation is when the two lines cross below zero mark, when this happens the sell generated is a reliable commodity signal.
In the commodities trading example illustrated and shown below, the Moving average generated a sell completed after MACD moved below zero line at same time that the Moving Averages gave a crossover commodity signal.
Where to Sell - MACD & Moving Average Commodity Strategy - Using MACD Commodities Trading Indicator - Sell Trading Signal
