I am a new “trader” here. I have this question, please someone help me out.
So, I was reading this page here on BabyPips about the MACD and the Moving Average and in that page the team wrote about “How to use MACD to confirm a trend”.
The thing is that I was on Trading View looking for the MACD and the Moving Average but I do not know which one is the right one. Can someone please tell me which is the real MACD and then what values give to each indicator on it’s on definitions?
Any other information will be tremendous helpfull people.
Hope you can understand my issue. Thank you very much for your time.
Have a great day.
On TradingView, the MACD (Moving Average Convergence Divergence) is typically labeled as “MACD” in the indicators list. The values for the MACD indicator usually involve a short-term EMA (Exponential Moving Average), a long-term EMA, and a signal line (often a 9-period EMA of the MACD). You can adjust these values based on your preferred trading strategy and time horizon.
As for the Moving Average, it is typically labeled as “Moving Average” or “MA” in the indicators list. You can choose various types of moving averages, such as Simple Moving Average (SMA) or Exponential Moving Average (EMA), and set the period length based on your analysis and trading preferences.
Understanding how these indicators work in conjunction can help you identify trends and potential trading opportunities. Additionally, consider exploring more resources to deepen your understanding of their applications in the market. Best of luck with your trading journey!
Moving Average Convergence Divergence compares the gap between two moving averages. The signal line is the difference of the two, negative or positive based on the signals line above or below 0.
yes - exactly the same thing, and for exactly the same reason arising from exactly the same history
as our mutual friend @tommor patiently keeps trying to explain to people here, almost all the standard indicator settings were originally invented for use on daily charts
and some of them from a 6-day week, too
that doesn’t, of course, mean that they can’t be of any value on faster charts, but it strongly suggests that some thought and care might be appropriate in trying to use them that way
i instinctively shudder when i see “experts” (usually “Youtube experts” or “forum experts”, admittedly, lol) saying that they use the standard settings for Ichimoku “because they’ve never found anything better” - it’s sometimes just another way of saying “i’ve never really looked at it, never thought it through, don’t understand it, don’t really know what i’m talking about and am only here to self-promote or to market something anyway”
Hey @flamingoproxy - Great point concerning 6-day weeks that really needs to be more widely understood.
Any indicator that uses all 6 daily parameters is going to be thrown well away from “true” by the shortened Sunday evening session of just a few hours. Just one example would be ATR.
Hello there people. Thank you very much for your replies.
So I went to Trading View and searched for the ones you told me about. And I added them to my chart, but as some of you told, it would be better to change the settings.
But for what settings should I change the MACD and the Moving Average (I went first with the Exponential Moving Average) ?
Probably should be better to change the daily parameters to 5 days, since Sundays are just a couple of hours.
Here I leave screenshots of my Trading View with the indicators and their default settings.
I use the 5 minute chart.
There are people using it with settings as low as 3-10-16 and as high as 40-90-30.
A very good approach, with indicators, is to start from “This is what I want to display, for my system - which indicator can do that and how do I use it, and with which settings?”
A terribly bad approach is “Here’s an indicator that people use - what settings do I want and what will it show me?”
Having said that, for most people, especially those without a lot of experience, slower settings are usually better than faster.
It’s true that a shorter lookback period will show momentum reversals closer to the highs and lows of the price-swings, but it will also have far more false signals.
Momentum oscillators mostly don’t represent price trends, only momentum trends.
Price and momentum often don’t trend simultaneously.
If you don’t quite understand the last few sentences yet, you shouldn’t be using MACD at all. Honestly.
hey bro, MACD and moving average are just indicators that work on the basis of already formed candles and price movements. so they are lagging indicators as they provide you data based on the near past previous price movements. So as they are lagging they might not be the best bet for you to find the trend in a particular time frame in real time and they might not be always reliable, if you really do want to find the trend, just look at plain candles, price action in the chart. the market usually moves in a zig zag pattern, so identify the respective lows and the highs, and when the market is making lower lows and lower highs, it is downtrend and vice versa. when the market breaks a lower high and makes a higher high that is the first sign that the trend is changing from downtrend to uptrend and vice versa. as i could not post more than 3 pics, i could not show you the images of how it works but i hope this might be helpful
