Sharing in the Group: Practical Tips for Using the MACD Indicator

Hello everyone! Today I want to share with you my most frequently used candlestick indicator—MACD, known as the "trend-following magic tool." It is especially suitable for judging market direction and reversals, and beginners can quickly get started.

1. Core Logic: Understanding the "Battle of Bullish and Bearish Energy"

MACD essentially calculates the difference between the "short-term moving average (EMA12)" and the "long-term moving average (EMA26)." Then, it smooths this difference with the signal line (DEA). Finally, it visually displays the changes in bullish and bearish forces with a histogram (BAR):

- Lengthening red bars: bullish momentum strengthens, and the upward trend may continue;
- Lengthening green bars: bearish momentum strengthens, and the downward trend may continue;
- Bars changing from red to green / green to red: the battle between bulls and bears is shifting, indicating an important trend reversal signal.

2. Three Practical Uses (with Scenario Explanations)

1. Golden Cross Buy, Death Cross Sell (Basic Usage)
When the MACD DIF line (white line) crosses above the DEA line (yellow line) from below, forming a "Golden Cross," it indicates short-term bullishness surpasses bearishness, suggesting a potential low buy (e.g., a daily-level golden cross suitable for swing trading); conversely, when a "Death Cross" occurs, short-term bearishness dominates, and it is advisable to take profits or stop-loss.
Note: In trending markets, Golden Cross/Death Cross signals are more accurate; in ranging markets, false signals are common, so combine with other indicators for filtering.

2. Divergence for Reversal Detection (Advanced Usage)
This is my most frequently used technique! When the price hits a new high but the MACD DIF line / green bars do not reach a new high (top divergence), it indicates weakening upward momentum and a high probability of a pullback; if the price hits a new low but MACD does not (bottom divergence), it signals a warning for a rebound.
Example: In November last year, a certain coin on the daily chart dropped to a new low of $8,000, but the MACD green bars were shorter than the previous low, showing bottom divergence, and it subsequently rebounded to $12,000.

3. Zero Line for Trend Direction
When the MACD DIF line and DEA line are operating above the zero line, it indicates an overall bullish trend, and look for golden cross opportunities first; when below the zero line, it indicates a bearish trend, and death cross signals are more significant.

3. Pitfall Avoidance Tips

- Do not rely solely on MACD: In ranging markets, MACD can produce frequent false signals. It is recommended to use it with "Volume" (volume increase signals are more reliable) or "Bollinger Bands" (to judge whether the market is consolidating or trending).
- Use larger timeframes to determine the trend: For example, use daily MACD to confirm whether the overall trend is bullish or bearish, then use 1-hour MACD to find specific buy/sell points, avoiding trading against the main trend.

(As I cannot directly attach screenshots from the OKEX app, you can open the OKEX candlestick page, select "MACD" from the indicator list, and compare with the above usage to observe the current market, such as whether there are divergence signals on BTC daily chart. Practicing once will help you understand quickly~)

If you want a more precise analysis of MACD signals for a specific coin, I can help analyze its current candlestick chart. Just provide the specific coin name and the timeframe you want to reference (e.g., daily, 4-hour).#Gate社区圣诞氛围感