Let’s talk about this MACD death cross at $RSR 4 hours. First, we need to be clear about its two limitations:
First, lag. MACD is derived from moving averages, so by the time a death cross appears, the price has usually already fallen some distance from its high.
Second, it fails in choppy markets. In a sideways market, golden and death crosses keep appearing back and forth, creating a lot of noise.
Before this crossover, the opposing bars continued for 24 four-hour candles, so the one-way move had some length to it, making this crossover cleaner than one in a sideways market. Also, since it is above the zero line, treat it as a pullback for now; it does not necessarily mean a reversal.
#RSR
First, lag. MACD is derived from moving averages, so by the time a death cross appears, the price has usually already fallen some distance from its high.
Second, it fails in choppy markets. In a sideways market, golden and death crosses keep appearing back and forth, creating a lot of noise.
Before this crossover, the opposing bars continued for 24 four-hour candles, so the one-way move had some length to it, making this crossover cleaner than one in a sideways market. Also, since it is above the zero line, treat it as a pullback for now; it does not necessarily mean a reversal.
#RSR