MACD is among the most dependable indicators. Although we do not believe in using any indicators other than candlesticks and Bollinger Bands in our own trading, and we follow the candlesticks charting and Bollinger Bands trading strategy to find trade setups, we still believe that MACD is a powerful indicator, particularly for novice traders who are accustomed to entering the market too early.
MACD is utilized by numerous seasoned Forex and stock traders. Clearly, we should not overestimate this indication. It is not a magical device that displays buy/sell indications. Nonetheless, it is among the most significant indicators. It may be used in conjunction with RSI to validate trade setups.
Sometimes your leading indicators and price chart indicate a trade setup. Still, MACD cautions you to wait and prevents you from losing money by going against the trend. In many instances where you wish to follow a trend, MACD indicates that it is too late since the trend is tired and may reverse. In this post, I will try my best to cover all of these situations and assist you in utilizing MACD in your trades as effectively as possible.
MACD trading is quite prevalent among traders. They wait for a few bars for a new MACD movement before entering. MACD is quite helpful for trading trends. It is also appropriate for confirming reversal signs. MACD must only be used for confirmation. The price is an important metric. Using MACD as confirmation for support and resistance breakthrough will be of great assistance. Those that trade based on support/resistance breakout must have MACD on their charts if they have sufficient technical analysis knowledge; else, their success rate will not be realistic.
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