Quick Guide to MACD for Crypto Newbies

"Timing your buy or sell just got easier."

What's MACD?

MACD (Moving Average Convergence Divergence) is a handy to that hints if a cryptocurrency like Bitcoin will go up or down soon.

Core Components

MACD Line: The "trend line" indicating the price direction.

Signal Line: The "helper" that confirms the MACD line's suggestion.

Histogram: A bar graph visually showing the gap between the MACD and Signal lines.

How It Works

The MACD line is like the gap between two rubber bands-one stretching faster (12-day average) and the other slower (26-day average). The Signal Line, a third rubber band (9-day average), helps make sense of this gap. The Histogram simply visualizes it.

Using MACD

Crossing Lines: MACD above Signal suggests a buy; below indicates a sell.

Zero Line: MACD above zero usually means prices are rising, and below zero means they're falling. MACD can give false alarms. If the MACD and price direction disagree, trade carefully; a change could be coming.

Quick Tips

Stick to default settings (12, 26, 9 days) as a beginner. Use MACD alongside other tools for better decisions.

MACD isn't foolproof. Always have a broader strategy and only risk what you can afford to lose.