Imagine you own a store and you use the MACD to see how many people are entering and leaving each day. If more and more people are entering the store (MACD is going up), you know that you could soon sell more products. But, if you see that fewer and fewer people are entering (MACD is going down), you would prepare to sell less and you could adjust your inventory. This is how the MACD works in the world of cryptocurrencies: it helps you see if the trend is favorable (up) or unfavorable (down) so that you can make informed decisions.
What is MACD used for?
It is useful for spotting changes in price trends. If you see the MACD going "up," it is a sign that prices could continue to rise, which could be a good opportunity to buy. On the other hand, if the MACD is going "down," it could indicate that prices could continue to fall, which would be a cautious time to sell or wait before buying.
Why was MACD created?
It was created to help people make smarter decisions when investing. Sometimes prices can be confusing, going up and down quickly. The MACD simplifies this information so investors can see more clearly what might happen to the price in the future.
How does MACD work?
The MACD uses two lines called "moving averages," which are like averages of the price over a period of time. These two lines cross and move apart. If the fast line (the one that reacts most quickly to changes) crosses up over the slow line, it's a sign that the price may continue to rise. If it crosses down, it's a sign that the price may continue to fall.
How does MACD affect cryptocurrencies when it goes up or down?
1. When the MACD rises (bullish signal):
If the MACD is rising and you have Bitcoin, you can consider holding your coins or buying more, hoping that the price will rise further.
2. When the MACD goes down (bearish signal):
If the MACD is going down, you might consider selling your Bitcoins to avoid losses, or wait until the MACD indicates a possible rise again.
To view the MACD indicator on Binance, follow these simple steps:
1. Log in to your Binance account: Open the Binance mobile app or website and log in to your account.
2. Go to the trading area: Select the “Trading” option. If you are using the web version, you can find this option on the top bar and choose “Classic” or “Advanced”. In the app, select “Markets” and choose the cryptocurrency you want to trade.
3. Select the cryptocurrency pair: Choose the cryptocurrency pair you are interested in. For example, if you want to see the MACD of Bitcoin (BTC) against the US dollar (USDT), search for "BTC/USDT."
4. Open the chart: Inside the trading area, you will see a chart showing the price evolution. Look for the "chart" icon (it usually looks like Japanese candles or lines).
5. Add the MACD indicator:
- In the web version:
- Click on the "Indicators" button that appears at the top of the chart.
- Type MACD in the search bar and select the "MACD" indicator.
- In the mobile application:
- Tap the icon that looks like a small graph with lines in the upper right corner of the graph.
- Search for MACD in the list of indicators and activate it.
6. Interpreting the MACD:
- The MACD chart will appear below the price chart.
- You will see two lines: a fast one (usually blue or green) and a slow one (red or yellow).
- If the fast line crosses the slow line upwards, this is a bullish signal (MACD is rising).
- If the fast line crosses the slow line downwards, this is a bearish signal (MACD is going down).
7. Check the histograms: In addition to the lines, the MACD has bars called histograms that reflect the difference between the two lines. If the bars are green and growing, it is a sign that the MACD is rising. If the bars are red and falling, it indicates that the MACD is falling.
By following these steps you will be able to identify whether the MACD is rising or falling and use this information to make more informed decisions about your cryptocurrency investments on Binance.
