Beginner's question about MACD

Hi guys,

I am a junior trader who is learning charting techniques at the moment. In MACD, can someone explain briefly on what the implications are when MACD and SIGNAL lines are overlapping for a period of time. Please see example:


In the example they are horizontally aligned, what if they overlapping in upward or downward trend? My understanding is that the market is consolidating, so there is no indications whether it’s upward or downward trend. Is that correct? Can someone shed some lights on please?

Thanks,
Ken

Macd… It’s one of a lagging signal too. Yes u r right. Price is consolidating when they horizontal aligned. There is no indication… if both line is below zero… Means it still on a downtrend. If both line is above zero means the price is still on the uptrend. Bug if u use the line cross over to place your trade u in danger… Cos Macd line only appear after the price action is over. Means when u see it cross n u start place your trade. U already behind the price action. The price may jump until nowhere. When u start your place your trade the action may be finish n start to turn against u


Example see the image. It cross over. N u will feel it a good chance to sell. But when u trade sell. Price go against instead u n it went up

Another example y it lag. See the circle I hv draw. Real price action start at circle No1. Circle no2 Macd start to cross n u place your trade. Circle no 3… How many pips u want to earn? Circle no 4… B4 u take profit price turn against u…


It gd to learn how the indicator are use for. But don’t rely on it too much. I have try alot lot of indicator… In the end I don’t use indicator anymore. I only use overlay, examples Like Ichimoku cloud, Sar, bb… Best is learn price action of the candle. Cos each candle hv it own price action.

May God be with us

Thanks very much Alan for the explanation, much appreciated.

Your most welcome, we can exchange ideal n learn from each other. Maybe u hv other strategy I wish to learn from u too. But, there is ways of catching price reverse or can say b4 the price start to pull back or even reverse. For mi I’m using afew layout together. But don’t wish to complicate u. So I be telling u 1 of the useful overlay that I use. That is Sar. Below is 1 of the example of my trading platform pls have a look at it. Layout is different from indecator cos layout move together with the price, it gv u a more clear picture of how the price doing. Cos every individual candle hv it own price action.


Change the settings same as mine for the sar. And the candle I use is heikin candle. I use heikin candle cos it help to filter out all the noise n gv u a more smooth n easy to read chart. Pls see the circle of 1,2 n 3. No 4 is the order I place. I’m using a 10min chart as I’m a scalper n I hunt for reverse n pull back. Won’t it be nice if able to place a order like circle no 4? Won’t be late for placing trade n can get more pips, plus more confident. In order to trade using Sar. First the Sar must b near the price. Pls see the 3 of the circle. The Sar is near the price, if it far from the price means price is still moving it way not yet lost power. Hv to b careful when sar is near the price… The signal is… The last Sar. U see carefully of the 3 circle. The last 2 Sar is side by side with each other. B4 that, u see the Sar is going up if it up trand, or Sar is going down if it down trand. When Sar is side by side means the power is losing n reverse or pull back is coming soon. Remember there is always 1 thing v funny about the price action. Examples it a up trand, n u want to trade the down trand. When Sar is side by side. Price will move down towards the last Sar. Don’t worry, when it going down. Don’t place any order. Cos it just a v small pull back, it confirm will pull back. After it going to touch the last Sar the price will move back up again. N reach higher high or nearly same as the previous price candle, u watch carefully it will keep stall like it been block can’t go up any longer. It means it time to place your trade. Once u place the trade example on circle no4. Just wait for price for pull back or reversed n earn pips. Hope u understand what I’m trying to tell u.
May God be with us

MACD can be used as a good confirming of the trend. For example, if there is a bullish crossover below the zero line then the indication is for further upside movement and the opposite.