When it comes to technical analysis of any cryptocurrency asset, there are various tools and indicators that has proven to be very beneficial in determining the prices and movements in the cryptocurrency market. MACD indicator or a Moving Average Convergence Divergence is basically a type of technical analysis indicator that determines a new trend. MACD is a very popular and one of the most used type of indicators, it is also known as trend-following indicator. This type of indicator indicates the relationship between two moving averages. With this, the MACD helps to determine the market trend direction. Basically, what the MACD indicator does is that it compares two EMAs or Exponential Moving Averages and shows the difference between the fast and slow Exponential Moving Averages. On tradingview, the MACD indicator shows the MACD blue line and the signal orange line.
MACD Indicator and Why it is Good for Trading Cryptocurrencies
In my opinion, the MACD is a great indicator for cryptocurrency trading. We all know that the cryptocurrency market is very volatile and comprises of a lot of trends. With the MACD indicator a trader or investor can predict what the next trend will be. This will give the trader or investor an insight on when to buy or sell a particular cryptocurrency.
is the MACD better than the RSI indicator?
Both MACD and RSI are all very good indicator because they can help determine when to buy or sell a particular cryptocurrency. In my opinion, both should be used together when trying to predict the market trends more accurately. The MACD helps to determine the trends in the market while RSI helps to indicate the overbought and oversold situations in the market. Both are quite similar because an overbought situation in the market can be interpreted as an upward trend while an oversold can be interpreted as downward trend. A lot of traders and investors like to buy at the bottom of the downward trends and sell at the top of the upward trends.
How to add the MACD indicator to the chart
Adding the MACD indicator on any cryptocurrency chart is quite easy to do with trading view.
- Go to tradingview and click on the indicators tab
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- On the search, search for MACD
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- Select the first one written only MACD
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- Click on the MACD area and click on the settings icon.
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- On the MACD settings, you can change the inputs and also the styles depending on your needs.
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