Uses of MACD
Positive signs include:
1.MACD or oscillator increasing in positive direction
2.MACD signals a golden cross(oscillator transitions from negative to positive)
3.MACD turns from negative to positive(meaning the short-term moving average crosses the long-term moving average)
Signals according to the direction of the indicator
1.When MACD increases in a positive direction, it means that the separation between the short-term and long-term moving averages increases.
2.If the gap increases positively, the upward trend is strengthened.
3.Negatively, if the gap increases, it means the strengthening of the downward trend. However, it can only be viewed as the current state and is not a proactive tool.
4.If the oscillator increases in the positive direction, it means that the increasing trend of the short- and long-term separation is strengthening than the existing increasing trend, which is a better signal than MACD increasing in the positive direction.
Golden Cross, Dead Cross
1.Depending on whether the MACD and the signal are a golden cross or a dead cross, there is a previous signal that is used as a signal to buy or sell, but it is not recommended because it is lagging.
2.At a golden cross, the oscillator changes sign from negative to positive, and at a dead cross it changes from positive to negative.
3.Although it is too late to use it as a direct signal to buy or sell, from the perspective that the trend continues, a golden cross can be used as an auxiliary indicator that a future bull market will arrive, and a dead cross can be used as an auxiliary indicator that a future bear market will arrive.
4.However, when the oscillator is closr to 0 and then diverges due to a prolonged sideways trend, this should be viewed as an important signal because it signifies divergence after the price convergence.
MACD turns from negative to positive
1.This is a positive sign because it simply means that the short-term moving average crosses the long-term moving average.