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