MACD Trend Following Strategy PDF
MACD and Moving Average Strategy
Since the MACD indicator uses 26 and 12 EMA to draw the MACD indicator lines, we shall compare these two EMAs with the MACD commodity trend following technical indicator to determine how these buy & sell commodity signals are generated and how the MACD indicator can be used to generate trend following signals.
MACD Commodity Trading Indicator - MACD Commodities Trading Trend Following Commodities Trading Strategies - MACD Commodities Technical Indicator Strategy - MACD & Moving Average Strategy
The MACD technical indicator is a trend following technical indicator meaning it generates commodity signals that are leading compared to lagging indicators that lag behind the commodities price.
Buy Commodities Trade
A buy commodity trade is generated when there is a MACD fast line crosses above the signal line - this shows that there is an upward commodity trend. However, as with any leading commodity indicator these commodity signals are prone to whipsaws/fake-out signals.
To eliminate the commodity trading whipsaws it is good to wait for confirmation commodity signals of the buy trading signals. The confirmation commodity signal is when the two MACD indicator lines cross above the zero line mark, when this happens the buy commodity signal generated is a reliable commodities trading signal.
In the commodity example illustrated and explained below, the Moving average commodity indicator generated a buy commodity trading signal, before the commodities price started to move up. But it wasn 't until the MACD indicator moved above the zero line that the buy commodity signal was confirmed, and the Moving Averages also gave an upward crossover commodity signal. From experience it's always good to buy after both the MACD indicator lines move above zero center line mark - which shows there is an upward commodity trend.
Where to Buy using MACD Commodity Technical Indicator - Buy Commodity Signal - MACD and Moving Average Strategy
Sell Commodity Trade
A sell commodity signal is generated when there is a MACD fast line crosses below signal line. However, just like the buy commodity trading signal, these are also prone to whipsaws/ fake outs.
To eliminate the whipsaws it is good to wait for confirmation of the sell commodity signal. The confirmation is when the two lines cross below the zero mark, when this happens the sell generated is a reliable commodities trading signal.
In the commodity example illustrated and explained below, the Moving average generated a sell confirmed after MACD moved below the zero line at the same time that the Moving Averages gave a crossover commodities trading signal.
Where to Sell - MACD and Moving Average Commodity Strategy - Using MACD Commodity Technical Indicator - Sell Trading Signal
