Here’s 5 ways investors can use the MACD indicator to make better trades

Here’s 5 ways investors can use the MACD indicator to make better trades


The Moving Average Convergence Divergence, also called the MACD, is a trend-following momentum indicator used widely by traders. Although the MACD is a lagging indicator, it can be very useful in identifying possible trend changes.

BTC/USDT daily chart. Source: TradingView

The MACD oscillates above and below a zero line, also known as the centerline. The shorter moving average is subtracted from a longer moving average to arrive at the value of the MACD. A signal line, which is the exponential moving average of the MACD completes the indicator.

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The blue line is the MACD and the red line is the signal line. When the blue line crosses above the red line, it is a signal to buy and when the blue line falls below the red line, it is a trigger to sell. A cross above the centerline is also a buy signal.

Let’s have a look at how to use the indicator for better entries and exits from a variety of positions.

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