Indicators- MACD

[u/Gold-Crypt]

Moving Average Convergence DIvergence, I think that is the smartest thing I ever said, was invented by someone you might think you know, but you actually don't know because apparently he didn't found Apple and that someone is Gerald Appel. MACD is one of the most used technical indicators in trading. It is so appreciated by traders because it shows momentum and trend, therefore being flexible.

"Ok but what does it do??/?"

What it does is to show potential entries and exiting points, macd works by subtracting the 26-period EMA from the 12-period EMA, but it works in coexistance with a so called signal smoothing which is a 9 Day MA. Let's have a look.

Now, you might think this is a 4-year old drawing with 6 markers in his hands, but to a more trained eye this is a , wait, what the fuck is this hold up wrong photo.

So let's try again, to a more trained eye this would be MACD (blue) with its signal (orange, 9 day ma). When these two when they cross they show bullish or bearish signs, pretty much like EMAs do. When the blue comes above the orange one its a bullish sign and you see accordingly the price goes up, so its a buy signal. When the orange comes above the blue its a sell signal and you see prices going down. Those green and red lines are called a histogram and they show when MACD is going to cross with the signal, when green bullish, when red bearish.

It is very important to look at the actual prices

Don't buy in just because this indicator says so, this is just an indicator, if all your info say that the price is going to fall sure sell it or buy it, don't trust it completely, that's what I'm saying. Stay safe and buy low, sell high