Let’s talk about this MACD golden cross at $AIN 4 hours. First, we need to be clear about two shortcomings of the indicator:
First, lag. MACD is calculated from moving averages, so by the time the golden cross appears, the price has usually already moved some distance from its low.
Second, it struggles in choppy markets. In a sideways market, golden and death crosses keep appearing back and forth, producing many false signals.
Before this crossover, the opposite-direction bars continued for 17 four-hour candlesticks, so the trend segment had some length and is somewhat more meaningful than a crossover in a sideways market. Also, since it’s below the zero line, treat it as a rebound for now.
First, lag. MACD is calculated from moving averages, so by the time the golden cross appears, the price has usually already moved some distance from its low.
Second, it struggles in choppy markets. In a sideways market, golden and death crosses keep appearing back and forth, producing many false signals.
Before this crossover, the opposite-direction bars continued for 17 four-hour candlesticks, so the trend segment had some length and is somewhat more meaningful than a crossover in a sideways market. Also, since it’s below the zero line, treat it as a rebound for now.
