MACD Technical Analysis Buy & Sell Trading Signals
Since the MACD indicator uses 26 and 12 Exponential Moving Average to plot, we shall compare these two EMAs with the MACD indicator to determine how these buy & sell metals signals are generated.
MACD Metal Indicator - Example of MACD Technical Indicator
The MACD indicator is a leading indicator meaning it generates metals trading signals that are leading compared to metals price action as opposed to lagging indicators that lag behind the metals price.
Buy Metal Trade
A buy metals trade is generated when there is a MACD fast line crosses above the signal line. However, as with any leading indicator these metals signals are prone to whipsaws/fake outs.
To eliminate the whipsaws it's good to wait for confirmation of the buy or sell trading signals. The confirmation metals signal is when the two lines cross above the zero mark, when this happens the buy generated is a reliable metals trade signal.
In the metal trading example illustrated and explained below, the Moving average metals indicator generated a buy metals trading signal, before metals price started to move up. But it wasn't until the MACD moved above the zero line that the buy metals signal was confirmed, and the Moving Averages also gave a crossover metals signal. From experience it's always good to buy after both the MACD lines move above zero center line mark.
Where to Buy using MACD Metal Trading Indicator - Buy Trading Signal
Sell Metals Trade
A sell metals signal is generated when there's a MACD fast line crosses below signal line. However, just like the buy metals signal, these are also prone to whipsaws/ fake outs.
To eliminate the whipsaws it's good to wait for confirmation of the sell metals signal. The confirmation is when the two lines cross below the zero mark, when this happens the sell generated is a reliable metals trade signal.
In the metal examples illustrated & described 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 cross-over metals trade signal.
Where to Sell using MACD Metal Indicator - Sell Trading Signal
