🔥 Tired of misleading signals on the chart? Let MACD and RSI work together to increase the accuracy of your decisions!
Have you ever felt that your analyses fail with market movements? This is where MACD and RSI come in - the power twins that reveal reversals before any other indicator!
In this quick guide, we will explain how both indicators work and how to combine them to choose entry and exit moments with greater confidence.
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⚙️ First: A quick overview of MACD
What is MACD?
It stands for Moving Average Convergence Divergence
It measures the difference between EMA12 and EMA26.
Why do we use it?
It reveals crossovers that start a strong movement 🔁
Identifying trend: Is the price rising or falling?
Measuring momentum: How strong is the current movement?
Confirming signals: Does buying or selling make sense now?
The histogram shows you the strength of momentum
(Bars above zero mean upward, below zero mean downward) 📈📉
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How does MACD work?
The MACD indicator consists of three main components:
MACD Line:
It is the difference between the fast exponential moving average (EMA12) and the slow exponential moving average (EMA26).
MACD Line = EMA12 - EMA26
Signal Line:
It is the exponential moving average of 9 periods of the MACD line.
Signal Line = EMA9 for MACD
Histogram:
It represents the difference between the MACD line and the signal line.
Histogram = MACD - Signal Line
Illustrative image of the MACD indicator
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🚦 Second: Reading MACD signals
Illustrative image of bullish and bearish MACD indicator signals
Bullish crossover (Buy):
MACD crosses the signal line from below, indicating a potential upward move.🚀
Bearish crossover (Sell):
MACD drops below the signal line ⇒ potential correction begins.🛑
Histogram:
Bars above zero = Positive momentum🚀
Bars below zero = Negative momentum🛑
MACD divergences and histogram
The histogram may reveal early signals for upcoming reversals.
Illustrative image (BTC-USD) with MACD Histogram divergence
Example: Histogram bars decline while the price rises - a warning of trend weakness.
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⚡ Overview of RSI
RSI = Relative Strength Index, measures momentum and ranges between 0 and 100.
Above 70: Overbought🔥
Below 30: Oversold🧊
Crossing 50: A sign of trend change🔁
RSI Divergence patterns
Illustrative image of divergence patterns (RSI Divergence)
Bullish Divergence:
Price is making new lows, but RSI is not following - a potential reversal upwards.
Bearish Divergence:
Price is rising while RSI is declining - a warning of a drop.
Illustrative image of BTC/USD showing RSI Bearish Divergence
Failure Swing pattern in RSI
One of the strongest reversal patterns:
RSI forms a peak
Declines
Attempts to rise again
Fails to break the previous peak then drops
Illustrative image of RSI Bearish Divergence with a Failure Swing pattern
🔗 Smart integration: How to use MACD + RSI?
1. Wait for a bullish crossover in MACD on a 1 or 4-hour frame.
2. Ensure that RSI is away from saturation (between 40–60 or above 50 for buying).
3. If the histogram starts to grow above zero, enter a buy and watch your target!
When MACD gives a bullish signal, and RSI confirms it by crossing above the 50 level, there is higher confidence in the decision.
Illustrative image of BTC/USD with MACD and RSI signals
Simply:
The MACD indicator gives the signal
The RSI indicator confirms the trend or warns of a reversal
The divergence between price and indicators alerts you early to any surprises
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Quick action plan
Watch for MACD crossovers
Check for RSI divergences
Ensure RSI crosses the 50 level
Note any negative divergence between price and indicators
Combine analysis with support and resistance or price patterns
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Conclusion
MACD and RSI indicators are not just lines on a chart; they are a language that can reveal market movements before anyone else.
By combining them, your decisions become clearer and more accurate. Start by testing them on a single time frame, then gradually expand your use.
✨ Try this plan and let me know:
What was the result of the first trade using MACD + RSI? 🚀