Why is MACD the king of all indicators?
This starts with the foundation of technical analysis - K-line. If you look deeper, K-line is actually an indicator, which is the actual price of the stock. Therefore, K-line is the indicator that can best capture signals in advance. No indicator can reveal the buying and selling signals of stock prices earlier than K-line, but K-line is also the indicator with the most deceptive signals, which is exactly the reason why we said earlier that you can't have your cake and eat it too. K-line is the most primitive product of technical analysis. If K-line is like this, what about other things? But human nature is always greedy, and we always want to find an analysis method that can not only prompt signals in advance, but also prompt accurate signals. At this time, the moving average came into being. People invented the moving average based on the K-line, so the moving average relies on basic data (see the code of the moving average).
After people created the moving average, they found that the moving average signal was much more accurate than the K-line. But at the same time, people also discovered the lag of the moving average. They found that the moving average could not give buy and sell signals in advance like the K-line. Only then did people realize that they had got the bear's paw but lost the fish.
Poor people continued to try to find a way to make the moving average also capture buy and sell signals in advance. At this time, the world's first real technical indicator appeared - the MACD indicator, which relied on the characteristics and data of the moving average and summarized a set of methods to prompt buy and sell signals. As a result, smart people did it, and the MACD indicator can indeed predict the buy and sell points earlier than the moving average, but then people found that the bear's paw was lost again - the accuracy of the moving average was gone.
In this way, people continue to look for various indicators under the greed and ignorance, and have not stopped until now. I hope that when people see this, they will stop looking from now on, cook your bear paw well, and the delicious food will be in front of you. So if we need indicators, one MACD is enough, and its combination with K-line and moving average can fully verify and complement each other.
MACD is called the exponential moving average difference, which is a major trend indicator.
It consists of five parts: long-term moving average DEA, short-term moving average DIF, red energy column (long), green energy column (short), and 0 axis (long-short dividing line). It uses the crossover of short-term moving average DIF and long-term moving average DEA as a signal. The crossover signal generated by the MACD indicator is relatively slow, but it is more effective when used to formulate corresponding trading strategies.
Set the fast EMA parameter of MACD to 8, the slow EMA parameter to 13, and the DIF parameter to 9. The moving average parameters are 5, 10, and 30. After setting the parameters, it is time to find the selling point.
