Stop fantasizing about 'lying down to earn'. There are always people asking: 'With a few thousand bucks to trade coins, can I multiply it by 100 times in a year?' My answer is: Yes, but it's definitely not through luck or insider information. In 2024, I used 1 BTC as capital and multiplied it by 180 times through precise operations in altcoins. The core tool is none other than the MACD that countless people scoff at.
Today, I'm not discussing the myth of getting rich quickly, but dissecting the practical logic that allows me to pinpoint accurately amidst wild price fluctuations. Once you learn it, you can say goodbye to chasing highs and cutting losses, letting small capital roll into significant profits.
Why is MACD the 'survival tool' for retail traders?
Many people think MACD is outdated and turn to various flashy indicators. But in the cryptocurrency market, where daily fluctuations exceed 10%, MACD is the most reliable 'anchor'.
Its core value lies in 'seeing the essence through the appearance': K-lines may deceive, trading volume may be manipulated, but MACD's dual signals of 'trend + momentum' can help you see whether the market is building upward strength or secretly unloading. More importantly, its signals are clear enough — golden cross, death cross, divergence, which are not as abstract as 'price action', even beginners can quickly get started by mastering the rules.
I have seen too many traders go from 'disliking MACD' to 'unable to live without MACD'. It's not that the indicator has changed, but rather they finally understand: the complex thing is not the market, but the hearts of those who always want shortcuts.
Three types of golden crosses buy at the explosion point, three types of death crosses escape the peak without being trapped
Don't buy blindly at golden crosses and sell at death crosses. Even with a golden cross, the effectiveness varies greatly depending on the position.
Golden Cross: Only do the two most certain ones
- Golden cross near the zero line: A chance to load up! If the price stabilizes above the zero line, it indicates a reversal of the buying and selling forces. At this time, the golden cross is often the starting point of a new round of upward movement. In 2023, Ethereum pulled back from $1,800 to $1,600, and the MACD golden cross appeared near the zero line, then it surged directly to $2,400. This is a typical signal to add positions.
- Golden cross at a high position above the zero line: Add positions to take profit! If the price is above the zero line and a golden cross appears after a pullback, it indicates the end of the adjustment and the start of a major uptrend. Last year, SOL rose from $20 to $40, pulled back to $30, and the MACD golden cross at a high position indicated it then soared to $100. This is a signal of trend continuation.
Key Reminder: Golden crosses must be combined with trading volume! A volume-increasing golden cross is reliable, while a volume-decreasing golden cross may be a trap. As for low-level golden crosses below the zero line, it is advisable to be cautious when trying positions — the long-term trend is still down, and such golden crosses often only signal a rebound. For example, the low-level golden cross for Bitcoin at $15,000 rebounded to $20,000 before pulling back again; chasing high will surely get you trapped.
Death Cross: Three positions to run away from
- Death cross at a high position above the zero line: Clear out decisively! If the price is high and a death cross appears, it means the bulls are exhausted. In 2021, when Bitcoin was at $69,000, the MACD death cross appeared at a high position, and then it plummeted to $30,000, which was the last chance to escape the top.
- Death cross near the zero line: Stop-loss and exit! If the price fluctuates near the zero line and a death cross appears, it indicates the end of a rebound and the restart of a decline. Last year, DOT rebounded from $20 to $25; when the MACD death cross appeared near the zero line, it then dropped to $10. Don't fantasize about it going back up.
- Death cross below the zero line: Mainly wait and see! The trend is already downward, and the death cross is just a signal for accelerated decline. Buying the dip is like catching falling knives.
Divergence: The ultimate trick of MACD, with an accuracy rate exceeding 80%
If golden crosses and death crosses are the basic operations, then 'divergence' is the advanced play of MACD, helping you capture turning points that others can't see.
Bottom Divergence: Price can't drop anymore, prepare to buy
The price hits a new low, but the MACD's DIFF line or bar line doesn't make a new low, indicating insufficient downward momentum. For example, in 2022, Bitcoin fell to $15,000, a lower price than before, but the MACD bar line was higher than at the previous low (green bars becoming shorter), indicating a bottom divergence, which then rebounded to $40,000.
Buying point: Don't rush to enter; wait for the bar line to turn from green to red or for a golden cross to appear before buying; the win rate is higher.
Top Divergence: Price can't rise anymore, prepare to sell
The price hits a new high, but the MACD's DIFF line or bar line doesn't make a new high, indicating that the upward momentum is exhausted. This year, a certain altcoin rose from $1 to $3, hitting a new price high, but the MACD red bars were shorter than at the last peak, indicating a top divergence, which then plummeted to $0.8.
Selling Point: Sell decisively when the bar line turns from red to green or a death cross appears. Combine with candle patterns like Evening Star and Gravestone Doji for more accurate top escape.
Three pieces of advice for beginners to avoid three years of detours
1. Don't stubbornly stick to default values for parameters: The software's default 12/26/9 is too lagging; for short-term, you can adjust to 5/10/3 (responsive), for medium-term use 10/20/6. Experiment more to find parameters that suit your rhythm.
2. MACD cannot be viewed in isolation: Must be combined with the trend! For example, if the price is above the 200-day moving average, the MACD golden cross is reliable; below the moving average, the golden cross may be a trap.
3. Tools are lifeless, people are alive: Last year, I captured several doubling coins using MACD, but there were also times I failed. The key is strict stop-loss, don't let one mistake ruin all profits.
Finally, I want to ask: Are you using your MACD correctly? Small capital wants to double quickly, relying not on luck but on precision. MACD is the tool that helps you improve precision — but no matter how good the tool is, it needs a person to use it.
