Comment on Indicators (Part 2)

Deepak Goyal RD2640 commented on 12 Dec 2016, 01:52 AM

Thanks a ton Karthik for the beautiful explanation of all this. I have two things:

1st query is about MACD. After introducing the 9 day SMA signal, we are totally ignoring the negative and positive territory aspect of MACD (i.e. above or below level 0), but the Kite application MACD study still shows the territory. Does it signifies anything standard if the crossover is being made in positive or negative territory.

And the 2nd thing is about the update portion of MACD 🙂 now the time has come for this :). Please update the part of the chapter with this:

1. The sentiment is bullish when the MACD Line crosses over upside the 9 day SMA signal line as MACD Line is more reactive to current prices as signal line is an average of MACD points itself. When this happens, the trader should look at buying opportunities.

2. The sentiment is bearish when the MACD Line crosses over downside the 9 day SMA signal line. When this happens, the trader should look at selling opportunities.

AND A SMALL PORTION OF EXAMPLE:

For example, the first vertical line starting from left points to a crossover where the MACD Line crosses downside the signal line (red one) and hence one should look for a selling opportunity. The 2nd vertical line from left, points to a crossover where the MACD line (black one) crossed upside the signal line, hence one should look at buying opportunity.

Thanks Sir

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