#Overbought & #oversold
📊 MACD: How does it work and how to look for a reversal? 📈📉
The main trend and momentum indicator that helps to understand who is currently leading the market - buyers or sellers.
🟢 Bottom-up crossing (Bullish signal)
• The signal line crosses the main one from the bottom up.
• The histogram goes from the red zone to green (from negative to positive).
• The downward momentum fades away - there is a chance for the start of a new uptrend or a powerful rebound. $NXPC
🔴 Top-down crossing (Bearish signal)
• The signal line crosses the main one from the top down.
• The histogram changes color from green to red (goes below zero).
• Buyers are exhaling - the probability of a correction or a downward trend reversal increases. $RAVE $STABLE
⚡ Divergence (The most powerful signal)
• The price updates the minimum, and the MACD shows a higher minimum - the market is preparing for a jump up.
• Price is making a new high and MACD is making a lower high - prepare for a cooldown or a drop.
⚠️ Golden rule: MACD works great in a trending market, but can give false signals during a flat (sideway) market. Always combine it with support/resistance levels and volumes.
📊 MACD: How does it work and how to look for a reversal? 📈📉
The main trend and momentum indicator that helps to understand who is currently leading the market - buyers or sellers.
🟢 Bottom-up crossing (Bullish signal)
• The signal line crosses the main one from the bottom up.
• The histogram goes from the red zone to green (from negative to positive).
• The downward momentum fades away - there is a chance for the start of a new uptrend or a powerful rebound. $NXPC
🔴 Top-down crossing (Bearish signal)
• The signal line crosses the main one from the top down.
• The histogram changes color from green to red (goes below zero).
• Buyers are exhaling - the probability of a correction or a downward trend reversal increases. $RAVE $STABLE
⚡ Divergence (The most powerful signal)
• The price updates the minimum, and the MACD shows a higher minimum - the market is preparing for a jump up.
• Price is making a new high and MACD is making a lower high - prepare for a cooldown or a drop.
⚠️ Golden rule: MACD works great in a trending market, but can give false signals during a flat (sideway) market. Always combine it with support/resistance levels and volumes.