What needs to be emphasized here is that any technical index is only an aid, and the final trading decision still needs to use its own actual combat experience to build a trading system that suits you.
The abbreviation of MACD (Moving Average Convergence-Divergence) is an exponentially smooth average of similarities and differences, which was invented by American Gerald Appel in 1979. MACD is used to judge the strength, direction, energy and trend cycle of the trend, so as to grasp the trading opportunity.
Developed by Ma is a megatrend indicator, which consists of two lines and one column.
As can be seen from the above picture, red is the fast line, blue is the slow line, red and green columns are the energy columns, and the zero axis is the long-short dividing line.
The automatic setting of MACD is: fast line 12 moving average (EMA), slow line 26 moving average and kinetic energy column 9 moving average.
Many traders will change the moving average of MACD according to their trading preferences, risk-taking ability and trading products, such as (6,30,6) or (6,30,9).
The change of parameters is to "solve" the problem of MACD passivation. The lower the EMA, the duller the trading signal, but the accuracy will be relatively reduced.
For foreign exchange and commodity trading, I prefer the original parameters (12,26,9). Of course, MACD index is only a part of trading strategy, and it should also be combined with K-line shape, moving average, trend, stop loss and target price to have better effect.
MACD absorbs the advantages of EMA. The trading of EMA works well when the trend is obvious, but when the market is consolidating, the signals sent by EMA are too frequent and extremely inaccurate.
MACD can just be done in the consolidation market, and to some extent, it can overcome the false signals that frequently appear in the moving average; In the trend market, the success of the moving average can be guaranteed to the maximum extent.
How to use MACD
The basic rule of MACD is:
When the fast line is below the slow line and the red column becomes smaller or the green column becomes larger, it is a short market, indicating that the bulls are still weak and the bears are strong.
When the fast line is below the slow line, the red column becomes larger or the green column begins to become smaller, it is a bullish market, indicating that the bears are weak and the bulls are strong.
The zero axis is the long-short dividing line. When the fast and slow lines pass through the zero axis, the rising speed will be accelerated. When the fast and slow lines pass through the zero axis, the falling speed will increase.
The following are the trading opportunities with the highest odds of using MACD:
1, golden fork dead fork
The fast line and slow line form a golden fork or a dead fork above or below the zero axis. This is the opportunity to go long or short.
It is worth noting that although the formation of a golden cross between the fast line and the slow line below the zero axis may be a bottoming signal, it is generally not the best time to do more, because it is still in an empty area at this time, and it is likely to continue the previous trend after consolidation.
2, the second golden fork dead fork
When the fast line and the slow line form a golden cross, then the price goes up, and then the price goes back, forming a golden cross again above the zero axis. At this time, it is a buying opportunity.
When the fast line and the slow line form a dead fork, then the price falls and then the price rebounds. The fast line and the slow line once again form a dead fork below the zero axis, and this is a short opportunity.
If a secondary gold fork or a dead fork is formed below or above the zero axis, it is necessary to cooperate with the K-line form for trading.
3. Diffusion after double-wire bonding
Take doing more opportunities as an example. If the fast line and the slow line are pulled back through the zero axis, the double lines are bonded and unfolded, and the red column becomes larger, which is a strong long signal.
On the contrary, it is a strong short signal.
4. The golden fork and the dead fork alternate
For the timing of shorting, if the fast line and slow line form a golden fork below the zero axis and do not cross the zero axis to form a dead fork, it means that the rebound is over and you can add positions to short.
On the contrary, it is to do multi-signal.
5. After consolidation, the golden fork is dead.
If the fast line and the slow line form a golden cross after running in the horizontal line below the zero axis, it means that the consolidation is over and more opportunities are coming; On the contrary, this is a short-lived opportunity.
Deviation transaction
For the classic indicator of MACD, apart from the common golden fork and dead fork, another essence is "deviation".
In foreign exchange transactions, it can be said that deviation is the strongest signal and the highest accuracy.
The principle of deviation is simple:
When the price is rising or falling, but the kinetic energy column and double line of MACD have not hit a new high or a new low, the trend is just the opposite of the price trend.
This shows that the motivation for bulls or bears to continue to rise or fall has been greatly weakened, and the trend reversal is about to appear.
At this time, everyone can open positions in batches or wait for the peak signal to appear and enter the market decisively.
1, top deviation
When the price trend is getting higher and higher, the market has been rising, while the red column and double line trend of MACD are getting lower and lower.
It shows that the price increase process is weak and the external force is weak, suggesting that there will be a wave of decline soon in the future, which is a strong signal of decline.
2. Bottom deviation
When the price trend is getting lower and lower, the market has been falling, and the MACD wave is indeed getting higher and higher, indicating that the downward trend is coming to an end.
Finally, it should be emphasized that if the MACD double line and the red-green column show deviation signals at the same time, and the deviation appears more than twice in a row, then the possibility of the upcoming trend reversal will be greatly improved.
The above content comes from the opening of users in Hu Hui.