MACD (Moving Average Convergence and Divergence) is one of the most commonly used technical indicators by numerous traders.
It is a lagging indicator that is used in many ways to identify trends and is even used to distinguish divergence points, where an ongoing trend might come to an end.
Today, we will use this MACD to recognize trading points. It is an indicator that plots above and below the zero line, depending on the relative position of moving averages and prices.
In our method, we will use MACD as a flood gate that indicates whether the trend has turned up or down.
Longs: First pivot after MACD crosses over above zero.
Shorts: First pivot below MACD crosses below zero.
Trail stops on pivots.
Strong resistances and supports, fibbonacci targets, MACD divergence at the end of trends.
Weekly, daily, 60 minutes…
The chart is coded to turn blue when MACD is over zero and to turn red when MACD is below zero.
This method works best in trending markets.