MACD

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Moving Average Convergence Divergence (MACD) is a technical indicator that measures the momentum of assets based on two EMA, EMA 12 and 26. The calculation creates a MACD line that starts from negative to positive numbers. Like RSI, MACD is a momentum indicator that can help investors find changes in trends, signals for buying and selling, and price movements. The MACD indicator consists of MACD lines, signal lines, and histogram graphs.

One way to use MACD indicators is to notice when crossover, divergence, and rapid increase/decline happen. Investors can buy when the MACD line rises above the signal line and sell when the MACD line crosses under the signal line. This is a general principle when using MACD because crossovers are a general indicator of the strength of the asset. However, like other technical indicators, MACD is not 100% accurate, especially for volatile assets such as crypto.

So, MACD is better when combined with other technical analysis elements such as trend lines and support and resistance. You can learn more about what is technical analysis at Pintu Academy.

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