Author: @madridbg, through Power Point 2010, using public domain images. tradingview
Greetings and welcome dear readers of this prestigious platform, the delivery that concerns us in this opportunity is of financial type and is associated with the use of technical indicators as a mechanism to deal with the scenarios posed by the various assets associated with the crypto world.
In such a way, we will make a series of publications on the MACD indicator, where we can address the potential of this versatile and useful indicator, without further ado let's go to practice.
GENERAL ASPECTS OF THE MACD INDICATOR
As expressed in the title of this section, we will be mentioning general aspects about the indicator, so we will start by mentioning that the MACD is a technical analysis indicator of oscillator type, hence it is a very popular tool for traders, it is able to predict divergences in the market, as well as possible trends that are formed in it, without forgetting that a proper analysis of this allows to know the direction and strength of the market.
If we scrutinize about this indicator, we realize that its creation is due to Gerald Appel in the 70s and whose characteristics are maintained over time, hence the importance that the instrument has acquired.
MACD stands for Moving Average Convergence / Divergence, which is nothing more than a momentum and trend indicator, so it gives us valid information between the relationship of moving averages and the price of an asset and by its characteristics of being considered as lagging allows us to make a timely follow-up to the trend that develops the price.
Graphically it is composed of three fundamental variables (MACD, the signal and the histogram), where the confluence of the three creates a powerful tool to predict the behavior of an asset.
Fig.2. image extracted from the portal: tradingview
Statistically the components, are determined in different ways, for example the MACD lines is nothing more than the difference of two exponential moving averages that are able to follow the price in different periods, hence one is slower than the other.
For its part, the signal is used to take entry and exit positions in the market and is based on an exponential average of the MACD which tracks the price on a 9-period basis. The last and not least important variable is the histogram, which represents the difference between the signal and the MACD, it allows us to understand and determine the direction, strength and intensity of the asset.
Based on the above and product of the field where we operate is valid to ask ourselves can we use this indicator in the analysis of cryptocurrencies, knowing that its creation is a function of the market associated with the stock market, if doubt is a question that we can answer with a resounding YES, and it is this ability to adapt to the time and types of assets, which make it has endured over time and the best thing is that we can integrate them with other indicators in order to create a profitable trading strategy.
BIBLIOGRAPHICAL REFERENCES CONSULTED
[1] The MACD indicator and trading strategies. Article: Online Access
OF INTEREST
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Grateful with the community @project.hope and with all the management team of the same one that they motivate us to continue working in a mutual and balanced growth.
Hello friend @madridbg, thanks for sharing this important article on this technical indicator MACD, no doubt this kind of information helps us to continue to expand our knowledge about trading.
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These are very important points that we must know and above all study very well, to manage your trading dynamics very well.
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Dear friend @madridbg, I think the article you published is excellent, because it allows to understand a technical tool for trading, for me it is of vital importance, I will follow closely the publications you make about it.
See you later, have a great week.
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thank you
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