What is MACD?

MACD stands for Moving Average Convergence Divergence and shows the relationship between 2 moving averages of prices.

Bullish / bearish

A bullish trend on the MACD indicator would have the same shape as W, whereas a bearish trend would have the same shape as M.

Bullish trend using MACD

TECHNICAL ANALYSIS: How to spot a bullish trend (W) using MACD on Coinigy

Posted by Doctor Crypto on Wednesday, 29 November 2017

Bearish trend using MACD

TECHNICAL ANALYSIS: How to spot a bearish trend (M) using MACD on Coinigy

Posted by Doctor Crypto on Wednesday, 29 November 2017

After applying MACD, we can see that there is a red line, a blue line and red vertical lines.

  • Blue line indicates 12 day exponential moving average
  • Red line indicates 26 day exponential moving average
  • The red vertical lines indicate the difference between the blue and the red line
    • so if the blue line (12-day) is above the red line (26-day), the vertical lines are positive (above the horizontal axis)
    • so if the red line (26-day) is above the blue line (12-day), the vertical lines are negative (below the horizontal axis)

Generally speaking, an uptrend is represented by positive vertical lines and a downtrend is represented by negative vertical lines. Whenever the blue line intersects the red line, that means that there is a change in signal, such as people panicking due to some bad news and starting to sell and the movement turns bearish.

Huge positive vertical lines would mean that there is a bullish trend at that point and the coin is being overbought, whereas big negative vertical lines means there is a bearish trend at that point and the coin is being oversold.

What is the best time to invest? The best time to invest is when the blue line appears to be taking over the red line, which could signify the beginning of a bullish trend where people buy the coin and therefore increase its value. Hence, if you buy in at the beginning of the bullish trend, by the time the trend reaches its peak you will have made some noticeable profits.

Throw Coins!

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