A friend just asked me: “The $Q 4-hour MACD has formed a golden cross. Is it time to get in?”
I told him a few things straight:
1. This is a golden cross above the zero line, so it’s a trend-following signal and has some merit;
2. MACD is a lagging indicator, so by the time it crosses, the market has already moved quite a bit;
3. Don’t look at just one indicator—you should also consider trading volume and support and resistance.
He thought it over and said, “So I still need to watch the market myself.” Exactly. Indicators are just there to give you a heads-up.
I told him a few things straight:
1. This is a golden cross above the zero line, so it’s a trend-following signal and has some merit;
2. MACD is a lagging indicator, so by the time it crosses, the market has already moved quite a bit;
3. Don’t look at just one indicator—you should also consider trading volume and support and resistance.
He thought it over and said, “So I still need to watch the market myself.” Exactly. Indicators are just there to give you a heads-up.