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Easy way to trade with MACD
Easy way to trade with MACD
#forex trading # trading strategy # trading skills #macd
In forex trading, there are many indicators used by traders to help analyze the market and determine buy or sell positions. One of them is the MACD indicator (Moving Average Convergence / Divergence).
Easy Way to Trade with MACD.jpeg Picture 1. Easy Way to Trading Using MACD
The number of indicators sometimes makes traders confused about the indicators used. However, MACD is one of the indicators that are of great interest to traders. The reason is that this indicator is fairly simple to use.
What is MACD?
MACD is abbreviated as Moving Average Convergence / Divergence. This indicator aims to see the relationship between the Moving Average line, which is usually abbreviated as MA, short term and long term
MACD can also be used to see the difference in EMA (Exponential Moving Average) that moves slower or faster than the closing price.
Use of MACD
To measure the strength of the current trend
To measure market conditions that have been overbought (oversold) or oversold (oversold)
To indicate whether the market is bullish or bearish
From the usage above, MACD is quite popular because it rarely shows wrong buy or sell signals.
How to Read the MACD Indicator
To read the trend direction
For traders, the MACD indicator is very favored because it can show current market trends. If the price is going up or showing an uptrend, MACD will be above level 0. However, when the trend is down or down, then the MACD will be at level 0.
To determine entry
In addition to reading the trend direction, forex traders also use MACD with the Exponential Moving Average to determine buy or sell positions. If you want to open long positions, see if both EMA lines intersect from the negative area to the positive area. Conversely if you want to sell, see if the two EMA lines intersect from the positive area to the negative area.
To find out overbought or oversold conditions
Overbought or oversold conditions can be easily seen from the MACD indicator. To see overbought conditions, you can see the top of the MACD area in the positive area. Conversely, you can see oversold conditions at the top of the MACD area in the negative area.
Such is the explanation of the MACD indicator. Hopefully you can use it for the success of your forex trading.
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