MACD tactics: master momentum and seize trends
The following is a simple and easy-to-understand MACD strategy, which is suitable for BTC contract trading and helps novices get started easily.
Strategy Overview:
MACD (Moving Average Convergence Divergence) is a classic technical indicator, often used to determine market trends and momentum changes. Through MACD, we can find the ideal entry or exit time at the turning point of the market trend or when the trend is confirmed. This strategy is suitable for traders who want to follow the market trend and obtain stable returns with less risk.
MACD Basics:
The MACD indicator consists of three parts:
MACD Line (Fast Line): 12-day EMA (Exponential Moving Average) minus 26-day EMA.
Signal Line (Slow Line): 9-day EMA, usually plotted above the MACD line.
Histogram: The difference between the MACD line and the signal line.
How to judge the signal:
Golden Cross: When the MACD line crosses the signal line from below, a "golden cross" is formed, which is usually seen as a buy signal.
Death Cross: When the MACD line crosses the signal line from above, a "death cross" is formed, which is usually seen as a sell signal.
Histogram: When the histogram turns from negative to positive, it means that the momentum turns from short to long; conversely, the momentum turns from long to short.
Specific steps of MACD tactics:
Step 1: Confirm the trend direction
Golden Cross Long: When MACD forms a golden cross and the histogram turns from negative to positive, it indicates that the market trend has changed from bearish to bullish, and you can consider going long (buying contracts).
Death cross short: When MACD shows a death cross and the histogram turns from positive to negative, it indicates that the market trend has turned from long to short, and you can consider shorting (selling the contract).
Step 2: Confirm the signal
Combined with trend judgment: If the golden cross or death cross occurs in the same direction of a larger trend (such as a daily or weekly line), the signal is stronger. For example, if a golden cross occurs in an upward trend, the long signal is more reliable.
Step 3: Set stop loss and take profit
Stop loss: Set near the reverse signal of MACD. If the market reverses, avoid large losses.
Take profit: It can be set at a key position of the previous high or low of the market, or when MACD shows a reverse signal again, close the position and take profit.
Step 4: Execute the transaction
Once the signal is confirmed, enter the market according to the strategy and set the stop loss and take profit. When the predetermined conditions are met, execute decisively without hesitation.
Advantages and precautions of MACD tactics:
advantage:
Strong trend: MACD is good at identifying trend turning points in the market and is suitable for trend-following operations.
Simple and practical: easy to understand and use, especially for beginners.
Note:
False signals in volatile markets: MACD is prone to send out false signals during consolidation or volatile markets, so it is necessary to confirm it in combination with other indicators (such as support and resistance levels, K-line patterns).
Avoid over-trading: Only trade when the trend is clear, and avoid frequent entry and exit in weak or uncertain markets. MACD strategy: Master momentum and seize trends
Strategy Overview:
MACD (Moving Average Convergence Divergence) is a classic technical indicator, often used to determine market trends and momentum changes. Through MACD, we can find the ideal entry or exit time at the turning point of the market trend or when the trend is confirmed. This strategy is suitable for traders who want to follow the market trend and obtain stable returns with less risk.
MACD Basics:
The MACD indicator consists of three parts:
MACD Line (Fast Line): 12-day EMA (Exponential Moving Average) minus 26-day EMA.
Signal Line (Slow Line): 9-day EMA, usually plotted above the MACD line.
Histogram: The difference between the MACD line and the signal line.
How to judge the signal:
Golden Cross: When the MACD line crosses the signal line from below, a "golden cross" is formed, which is usually seen as a buy signal.
Death Cross: When the MACD line crosses the signal line from above, a “death cross” is formed, which is usually seen as a sell signal.
Histogram: When the histogram turns from negative to positive, it means that the momentum turns from short to long; conversely, the momentum turns from long to short.
Specific steps of MACD tactics:
Step 1: Confirm the trend direction
Golden Cross Long: When MACD forms a golden cross and the histogram turns from negative to positive, it indicates that the market trend has turned from bearish to bullish, and you can consider going long (buying contracts).
Death cross short: When MACD shows a death cross and the histogram turns from positive to negative, it indicates that the market trend has turned from long to short, and you can consider shorting (selling the contract).
Step 2: Confirm the signal
Combined with trend judgment: If the golden cross or death cross occurs in the same direction of a larger trend (such as a daily or weekly line), the signal is stronger. For example, if a golden cross occurs in an upward trend, the long signal is more reliable.
Step 3: Set stop loss and take profit
Stop loss: Set near the reverse signal of MACD. If the market reverses, avoid large losses.
Take profit: It can be set at a key position of the previous high or low of the market, or when MACD shows a reverse signal again, close the position and take profit.
Step 4: Execute the transaction
Once the signal is confirmed, enter the market according to the strategy and set the stop loss and take profit. When the predetermined conditions are met, execute decisively without hesitation.
Advantages and precautions of MACD tactics:
advantage:
Strong trend: MACD is good at identifying trend turning points in the market and is suitable for trend-following operations.
Simple and practical: easy to understand and use, especially for beginners.
Note:
False signals in volatile markets: MACD is prone to send out false signals during consolidation or volatile markets, so it is necessary to confirm it in combination with other indicators (such as support and resistance levels, K-line patterns).
Avoid over-trading: Only trade when the trend is clear, and avoid frequent entry and exit in weak or uncertain markets.
This MACD strategy helps traders identify the right entry and exit times by following trend momentum. It is a robust trading strategy. Through strict signal confirmation and stop loss and take profit settings, novices can also effectively manage risks and gradually improve their trading level.
