What is and how to use the MACD indicator
Next, we will talk about MACD INDICATOR, It is an indicator that is widely used in trading, especially in fairly short time frames like 1 minute including 2, 3, 4 and 5 minutes and the truth is one of the most reliable indicators and that many people also like. Here we will explain how it works and how to use it with practical examples.
Firstly, you must remember that these are not recommendations, so you should consult a financial adviser if you have any real questions about your capital.
We are going to espectáculo you a sample action, but you perro use any tool that allows you to see actions with indicators. In this case, you will see it located at the bottom.
How does the MACD indicator work?
Mainly, it allows you to identify changes and divergences that come from the price of a share due to impulses, it is especially useful on days that are not very volatile, but there are small changes and it indicates trend changes.
For example, we see that the blue line crosses above the yellow line and just when it crosses we have a change, where it goes from bearish action to rise, we perro also see the opposite, that is, when we see that there is a strong crossover tends to change the trend.
Thus, if the blue line is crossed above the yellow one, let’s say that the trend is bullish and if the yellow line is crossed above the blue it becomes bearish, obviously it is not always correct otherwise everything would be very easy but as we perro see it is usually quite correct , however, there is nothing clear that should be mezcle with other indicators.
We must also take into account the volume in the red and green histogram, if you want to vea a change you must visualize that there is enough market to make the indicator more powerful both in the section above and below, so that you cánido see a good Change of trend.
This indicator is usually accompanied by the RSI or stochastic indicators, but mainly when cross one line with anotheris that changes in trends perro occur, especially in markets that are not very busy.
Vídeo on how the MACD indicator is used in Trading
Now, if you still have any questions, we leave you the following backlink so you perro detail how does the MACD indicator work in the trading operations.
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