Trading with MACD: How To Use

This indicator is very easy to use because we only need to understand the intersections at the highest point and lowest point at this indicator as shown in the graph below. With this technique you can identify whether the trend is OVERBOUGHT or OVERSOLD. MACD can also be used to determine the direction of trend and the strength of trend that will be formed by only looking at the opening of the MACD. In this article I will not explain in detail on how MACD is formed mathematically and the history of this indicator and the history of this indicator.
Trading with MACD
Setting
FastEMA = 12
SlowEMA = 26
SignalSMA = 9
HOW TO USE
The uniqueness of this indicator is very clear because you can use it alone without the help of other indicators provided that setting of this indicator is correct. Otherwise you will suffer. Basically this indicator has its own circulation that looks like the shape of wave. The point is sometimes at the top sometimes at the bottom. When the wave of this indicator moves from the higher point to the lowest point it means that it has formed a complete cycle. When the cycle is completed there will be a huge change in trend. Please refer to the graph below to help you understand better. If you apply this indicator with other indicators such as RS1 14, RSI 3, Stochastic, Zigzag, WMA, and Parabolic SAR you will gain the most accurate setting in yourindicator. Therefore you can gain high profit and you can extend the direction and the ending point on trend. I will explain the best way to use this indicator as shown in the graph below:
Trading with MACD
OPEN SELL POSITION - In order to open SELL position you must refer to the final highest price formed when this MACD reach the highest value such as POINT 1.
- Make sure you enter SELL position when MACD highest value crossed as shown at POINT 1.
- You can also enter the SELL position by looking at the candlestick when MACD reach the highest value.
- When there is a change in the shape of bullish candlestick to bearish candlestick you can open SELL position after MACD reach the highest value and when MACD cross. Bearish trend will dominate the entire trend.
- Never enter SELL position in the middle of a trend.
- Please refer to TIMEFRAME H4 because it is the most accurate timeframe.
- You can take profit at TIMEFRAME H1 after MACD crossed at the lower value.
- If MACD at H1 does not cross you can HOLD SELL position until MACD cross at H1.
- You can also HOLD position in order to take profit until
MACD at H4 cross but there might be a sudden change in the middle of the trend.
OPEN BUY POSITION - In order to open BUY position you must refer to the final and
lowest price formed when MACD reach the lowest value such as POINT 2.
- You can also enter BUY position by looking at the candlestick situation when MACD reach the lowest value.
- When bearish candlestick change into bullish candlestick you can open BUY position after MACD reach the lowest value and when MACD cross bullish trend will dominate the entire trend.
- Never enter BUY position in the middle of trend.
- Please refer to TIMEFRAME H4 because it is accurate.
- You can take profit at TIMEFRAME H1 after MACD cross at the highest value.
- If MACD at H1 does not cross you can HOLD BUY position until MACD at H1 cross.
- You can also HOLD position to take profit until MACD at H4 cross but there might be a sudden change in the middle of trend.
Through this method you can apply these TIMEFRAME to open and close position at the currency pair that you enter:
OPEN POSITION - refer to TIMEFRAME H4
CLOSE POSITION - refer to TIMEFRAME H1
PRECAUTIONS
Trading with MACD
MACD has advantages and disadvantages that you need to know. In order to avoid problems, you can combine this indicator with other indicators as explained earlier in this article. Sometimes investors will make mistake when SIDEWAY takes place at currency pair because they don’t know the direction of the currency pair. Therefore if this happens, you must trust in MACD indicator so that you are not trapped. As I explained earlier, you can open position by referring to H4 and closing position by refereeing to H1. If you have been using this for a long time and become an expert you will clearly understand MACD. Why? When SIDEWAY takes place at H4
(as shown in the graph) after you open position, you must quickly refer to H1 because I am sure that at H1, MACD has already touched the highest or lowest value. Therefore you have saved your position for taking fast action to close after MACD cross at the lowest or highest value. The main thing that you need to pay attention to is the H4. Everything starts there. Below I listed the advantages, disadvantages and the best method to maximize this technique:
Enter SELL position after MACD reached the highest value. Make sure MACD crossed
at the highest value.
Enter BUY position after MACD reached the lowest value. Make sure MACD crossed at
the lowest value.
• Refer to TIMEFRAME H4 to enter position.
• Refer to TIMEFRAME H1 to close position.
• Avoid from entering SELL or BUY position in the middle of the trend because there
might be a sudden change in trend.
• Lastly be confident in the position that you have entered by being relaxed. Follow and trust in the indicator that you are using.

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