Using the MACD indicator is very simple; just remember one key phrase: One standard, the relationship between two lines. Here, the standard is just the zero line, and the two lines are the DIF line and the DEA line, that is, the fast line and the slow line. You just need to find the line changing quickly according to price fluctuations called the fast line, and the line changing slowly is the average line referred to as the slow line. Next, we will directly call the crossing relationship between the fast line and the slow line in the range between the zero line and describe 4 methods.
1, Above the zero line
When the fast line crosses up the slow line, it also becomes a golden cross; cryptocurrency prices rise with the market, at this point the entire market forms a bullish pattern, which is a buy signal.
When the fast line crosses down the slow line, the market is mainly money laundering. If the recent trend is favorable, one can hold positions and ignore short-term fluctuations. If the fluctuations are too large, one should reduce positions and observe.
2, Below the zero line
When the fast line crosses down the slow line, it is a death cross; at this point, the market is in a downtrend, trying to sell to observe, the entire market shows rapid price fluctuations down in a short time.
When the fast line crosses up the slow line, it is mainly a recovery; although there is a recovery, it is like light returning, the upward strength is weak, and the downward strength is strong. If previously trapped, during a market transition, try to exit to minimize unnecessary losses.
3. Key points of using the MACD indicator
1, When the fast line in the MACD indicator crosses above the slow line forming a golden cross, it is a buy signal. The higher the golden cross position, the stronger the buy signal. A golden cross above the zero line is strong, and below the zero line is weak.
2, When the slow line in the MACD indicator crosses down the fast line forming a death cross, it is a sell signal. The lower the death cross position, the stronger the sell signal. Above the zero line is a weak death cross, below the zero line is a strong death cross.
In practice, MACD not only helps newcomers catch strong upward points but also has the feature of catching bottoms; it does not only provide buy points but also sell points, reflecting golden crosses and death crosses, but both are advanced technical analysis methods. Understanding it will increase the success rate for newcomers.
