⚙️ MACD: the momentum radar that almost everyone uses incorrectly
The MACD (Moving Average Convergence Divergence) is not useful for predicting the future.
It serves to see when a movement is gaining or losing strength.
🧠 What is the MACD, simply put?
The MACD is built with:
A fast EMA (Exponential Moving Average) - fast exponential moving average
A slow EMA (slow exponential moving average)
A 'signal' line
And the histogram (the bars that go up and down)
It tells you:
If the momentum is bullish (upwards)
If the momentum is bearish (downwards)
And if that momentum is strengthening or weakening
🎯 How I use it in trading
1️⃣ MACD crossings
When the MACD line crosses above the signal line:
👉 bullish momentum gaining strength.
When it crosses downwards:
👉 bearish momentum gaining strength.
2️⃣ Histogram (the little bars)
Bars growing upwards → buyers are pushing hard.
Bars growing downwards → sellers dominate.
Bars shrinking → the movement is getting tired (a reversal or range may come).
3️⃣ Trend context
In an uptrend, I am more interested in bullish signals from the MACD.
In a downtrend, I am more interested in bearish signals.
I don't look at MACD alone, I combine it with structure + liquidity + RSI (Relative Strength Index).
🤡 Typical errors with MACD
Enter at each crossing as if it were a magic signal.
Use it on 1m–3m charts expecting surgical precision (it's a momentum indicator, not for crazy scalping).
Ignore the context: support, resistance, volume, liquidity.
MACD without context = a traffic light in the middle of the desert.
It doesn’t tell you where to turn, it only tells you that something is moving.
🧨 Mini rule of a serious trader
MACD tells me how much fuel is left for the movement.
Price + liquidity tell me where I want to enter and exit.
If you want us to continue with EMA (moving averages) or VWAP (Volume Weighted Average Price) as next indicators, comment MACD OK and share this with someone who enters at each crossing as if it were a divine signal. 🧠📊