MACD Technical Analysis Buy & Sell Trading Signals
Since the MACD cryptocurrency indicator uses 26 and 12 Exponential Moving Average to plot, we shall compare these two EMAs with the MACD indicator to determine how these buy & sell cryptocurrency signals are generated.
MACD Cryptocurrency Indicator - Example of MACD Technical Indicator
The MACD technical indicator is a leading indicator meaning it generates bitcoin trading signals that are leading compared to bitcoin price action as opposed to lagging indicators that lag behind the bitcoin price.
Buy Trade
A buy bitcoin trade is generated when there's a MACD fast line crosses above the signal line. However, as with any leading indicator these cryptocurrency trading signals are prone to whip-saws/fake-outs.
To eliminate the whipsaws it's good to wait for confirmation of the buy or sell cryptocurrency trading signals. The confirmation cryptocurrency signal is when the two lines cross above the zero mark, when this happens the buy generated is a reliable bitcoin signal.
In the cryptocurrency trading example illustrated below, the Moving average cryptocurrency indicator generated a buy bitcoin trading signal, before bitcoin price started to move up. But it wasn't until the MACD moved above the zero line that the buy cryptocurrency signal was confirmed, and the Moving Averages also gave a crossover crypto signal. From experience it's always good to buy after both the MACD lines move above zero center line mark.
Where to Buy using MACD Cryptocurrency Indicator - Buy Trading Signal
Sell Trade
A sell cryptocurrency signal is generated when there is a MACD fast line crosses below signal line. However, just like the buy bitcoin signal, these are also prone to whipsaws/ fake outs.
To eliminate the whipsaws it's good to wait for confirmation of the sell crypto signal. The confirmation is when two lines cross below zero mark, when this happens the sell generated is a reliable bitcoin signal.
In the cryptocurrency trading example illustrated below, the Moving average generated a sell confirmed after MACD moved below the zero line at the same time that the Moving Averages gave a crossover bitcoin signal.
Where to Sell using MACD Cryptocurrency Indicator - Sell Trading Signal
