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MACD indicator

The MACD (Moving Average Convergence/Divergence) indicator is a technical indicator designed to measure a financial asset's price movement for momentum and trend. It is comprised of two parts:
  • MACD line: (Short_term EMA - Long_term EMA)
  • Signal line: EMA of the MACD line.
(EMA is Exponential Moving Average)

If the MACD line is above the Signal line, it is usually a bullish signal, and if the MACD is below the Signal line, it is a bearish signal.


Why use it?

MACD is a popular indicator to help understand the technical trend of the asset. Trading with the trend increases profits and probability to profit. Because the indicator comprises two lines, we can use the cross event to time entries/exits.


How to use the MACD indicator in SamurAI

The MACD indicator is flexible, and we can control the EMAs comprising it and the signal line. This allows us better control and helps find better trades.

You can use the MACD indicator to:
  1. Find stocks in Bullish/Bearish trend. If the MACD line is above the Signal line, it is considered bullish, and if the MACD line is below the Signal line - it is considered bearish.
  2. Cross - We can time the trades for the cross events.
  3. Breadth - We can fine-tune the search to include trades in a 'zone' for a long time. For example, show trades that have been in a bearish trend for more than a month.


Settings



  1. Length: in days. During the market hours, we will simulate the last price as the closing price for that day to show how the MACD changes during market hours.
  2. Dropdown menu - pick from the options:
    1. MACD either above or below Signal line - Does not filter, show values in the column.
    2. MACD above Signal line - Bullish trend.
    3. MACD below Signal line - Bearish trend.
  3. Min Periods outside range: How long the MACD line was outside the range before the event. This is useful for
    1. Cross - Set the filter to 1
    2. Breadth - For example - Set the filter to 21 to see only stocks where the MACD was outside the range for one month before the cross.

Common use cases

  1. Stock is in a bullish trend - (1) Short EMA: 12 (default), (2) Long EMA: 26 (default) (3) Signal line: 9 (default) (4) MACD above Signal line (5) Min periods MACD below Signal line: 0 (default)
  2. Stock is in a bearish trend - (1) Short EMA: 12 (default), (2) Long EMA: 26 (default) (3) Signal line: 9 (default) (4) MACD below Signal line (5) Min periods MACD above Signal line: 0 (default)
  3. Stock crossed into bullish trend - (1) Short EMA: 12 (default), (2) Long EMA: 26 (default) (3) Signal line: 9 (default) (4) MACD above Signal line (5) Min periods MACD below Signal line: 1
  4. Stock crossed into bearish trend - (1) Short EMA: 12 (default), (2) Long EMA: 26 (default) (3) Signal line: 9 (default) (4) MACD below Signal line (5) Min periods MACD above Signal line: 1

Predefined

(coming soon)


Read more

About Technical analysis Engine - KB
About Bollinger Bands - KB
About RSI - KB
About MA indicator - KB
About MA Crossover indicator - KB
About MA Rank (unique) indicator - KB
About MACD indicator - KB
About Stochastic Oscillator - KB

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