This is a guide of the trading strategy. For a guide on how to read the graphs on the analysis page, click here.
The MACD line is the difference between the short-term exponential moving average (EMA) and the long-term EMA. In our strategy, the short-term EMA is 12 periods and long-term EMA is 26 periods.
The MACD line show the momentum of the price, ie. whether it’s trending up or down. Hence, a strategy based on the MACD indicator is a trend following strategy. This strategy works best when the price has a strong trend up or downwards.
The Data Trader MACD Crossover strategy generates a BUY entry signal when the MACD is positive. Exit when the MACD is negative. It generates a SELL entry signal when the MACD is negative. Exit when the MACD is positive.
