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Gate.io Blog

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Home Blog Gate. io AMA : Indicator - MACD

13:16

18 September

Gate. io AMA : Indicator - MACD



Q: What is MACD?


A: We have presented AMA of MA, the difference between MA and MACD is:

1.MA, is showing the price position according to the calculation of the period data.

2.MACD, is showing the trend is strengthening or weakening.


Q: What is the definition of MACD?


A:Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price.


The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.


A nine-day EMA of the MACD called the "signal line," is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals.


Q: What are the key points of MACD?


A:

1.Moving average convergence divergence (MACD) is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.

2.MACD triggers technical signals when it crosses above (to buy) or below (to sell) its signal line.

3.MACD helps investors understand whether the bullish or bearish movement in the price is strengthening or weakening.


Q: Please tell me more about EMA.


A: An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points.


Key points:

1.The EMA is a moving average that places a greater weight and significance on the most recent data points.

2.Like all moving averages, this technical indicator is used to produce buy and sell signals based on crossovers and divergences from the historical average.

3.Traders often use several different EMA lengths, such as 10-day, 50-day, and 200-day moving averages. (this EMA is a kind of MA, please refer to previous AMA of MA.)


Q: Let's see the picture.


A: Sure, please check below.


Red bar, from traditional meaning, shows the power of BUY.


Green bar, shows the power of SELL.


There's a ZERO line, when the MACD line crosses from below to above the signal line, the indicator is considered bullish. The further below the zero line the stronger the signal. When the MACD line crosses from above to below the signal line, the indicator is considered bearish. The further above the zero line the stronger the signal.


There are two lines of EMA:


12 Day - EMA, we call it Fast Line, can show the trend for short term trade.


26 Day - EMA, we call it Slow Line, can show the trend for long term trade.



MACD is the indicator of BUY or SELL strength.


When you see all the bars above zero line, means the strength is going up. Reversely, the strength is going down.


Above zero line, if Red bar becomes longer, means BUY power is going stronger. When Gree bar becomes taller, means SELL power is going stronger. Reversely, when the bars become shorter, means the powers are going weaker.


From above picture, combine the volume, MACD is weakening, means the market is going down and may continue this status.



Q: Where to check MACD in Gate.io?


A: We can get it in the webpage and APP.


Please go to Perpetual Contract trading page, and you will see MACD is below the K pattern.


Click “MACD” and the bar shape will appeared as arrowed position.




If you are used to APP, please open the main page, you can see Futures at the bottom menus.




Go to the trading page of Futures, please Click red rectangled button, go to the page to check the patterns.




Then click below red rectangled button, go to pattern page.




Below is the pattern page, you can see the indicators are listing out vertically at the right side of the page. Click MACD you can see the bar shap appeared in the bottom of the page.




Q: Thanks for all of today, and let's get to Question Session.


Alright.

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