NVDA
NVIDIA
-- 146.100 TSLA
Tesla
-- 422.620 NFLX
Netflix
-- 969.340 AAPL
Apple
-- 222.835 TEM
Tempus AI
-- 49.230 MACD
Recently, many fundamental uses of indicators have been updated, and it seems that popular indicators are still the focus of attention for most people. Therefore, following the crowd's interest, today, I will explain how to use MACD.
MACD is known as the "King of Indicators"! However, it has a drawback: a significant lag. Because of this, many people find it difficult to use effectively. The reason is that they haven't grasped the essence of the indicator.
The MACD indicator consists of the fast line (DIF), the slow line (DEA), red bars, green bars, and the zero line. Among these components, the zero line's practical significance is often overlooked. However, it holds considerable reference value because it can be seen as the dividing line between a stock's strong and weak phases.
When the two lines are above the zero line:
This indicates a strong phase. Once the two lines form a golden cross (bullish crossover) above the zero line, it often signifies that the stock is about to enter a reversal phase or accelerate its upward trend.
When the two lines are below the zero line:
This indicates a weak phase. Even if a golden cross forms below the zero line, it can only be regarded as a short-term rebound. Moreover, in many cases, the golden cross appears near the end of the rebound. Unless the golden cross forms very close to the zero line and the two lines quickly break above the zero line, it cannot be considered a transition from weakness to strength.
Practical Examples
Case 1
MACD is known as the "King of Indicators"! However, it has a drawback: a significant lag. Because of this, many people find it difficult to use effectively. The reason is that they haven't grasped the essence of the indicator.
The MACD indicator consists of the fast line (DIF), the slow line (DEA), red bars, green bars, and the zero line. Among these components, the zero line's practical significance is often overlooked. However, it holds considerable reference value because it can be seen as the dividing line between a stock's strong and weak phases.
When the two lines are above the zero line:
This indicates a strong phase. Once the two lines form a golden cross (bullish crossover) above the zero line, it often signifies that the stock is about to enter a reversal phase or accelerate its upward trend.
When the two lines are below the zero line:
This indicates a weak phase. Even if a golden cross forms below the zero line, it can only be regarded as a short-term rebound. Moreover, in many cases, the golden cross appears near the end of the rebound. Unless the golden cross forms very close to the zero line and the two lines quickly break above the zero line, it cannot be considered a transition from weakness to strength.
Practical Examples
Case 1
The chart above shows Tencent Holdings' daily K-line chart.
From the chart, we can see that:
Buy price (closing): 329.0
Sell price (closing): 381.8
Profit margin: approximately 16.05% $TENCENT (00700.HK)$
From the chart, we can see that:
Buy price (closing): 329.0
Sell price (closing): 381.8
Profit margin: approximately 16.05% $TENCENT (00700.HK)$
Case 2
This chart shows Xiaomi Group's daily K-line chart. $XIAOMI-W (01810.HK)$
From the chart, we can see that:
Buy price (closing): 19.88
Sell price (closing): 23.00
Profit margin: approximately 15.69%
Although we made a profit, we missed the subsequent uptrend. Therefore, on top of the original take-profit strategy, we could use the "universal take-profit case" from the 8th issue on my homepage to capture higher returns.
Case 3
From the chart, we can see that:
Buy price (closing): 19.88
Sell price (closing): 23.00
Profit margin: approximately 15.69%
Although we made a profit, we missed the subsequent uptrend. Therefore, on top of the original take-profit strategy, we could use the "universal take-profit case" from the 8th issue on my homepage to capture higher returns.
Case 3
This chart shows Xiaomi Group's daily K-line chart.
From the chart, we can see that:
Buy price (closing): 19.88
Sell price (closing): 23.00
Profit margin: approximately 15.69%
Although we made a profit, we missed the subsequent uptrend. Therefore, on top of the original take-profit strategy, we could use the "universal take-profit case" from the 8th issue on my homepage to capture higher returns.
Case 3
From the chart, we can see that:
Buy price (closing): 19.88
Sell price (closing): 23.00
Profit margin: approximately 15.69%
Although we made a profit, we missed the subsequent uptrend. Therefore, on top of the original take-profit strategy, we could use the "universal take-profit case" from the 8th issue on my homepage to capture higher returns.
Case 3
Example:
The following chart is the daily K-line chart of ENN Energy:
Key Points of the Strategy:
This strategy focuses on identifying entry points during the pullback phase of an uptrend.
The prerequisite is that the stock price must be in an uptrend, and the MACD fast and slow lines must be above the zero line.
There should be one or two consecutive green bars. If there are more than two green bars, the setup is invalid because too many green bars may indicate weakening momentum.
$Apple (AAPL.US)$
The following chart is the daily K-line chart of ENN Energy:
Key Points of the Strategy:
This strategy focuses on identifying entry points during the pullback phase of an uptrend.
The prerequisite is that the stock price must be in an uptrend, and the MACD fast and slow lines must be above the zero line.
There should be one or two consecutive green bars. If there are more than two green bars, the setup is invalid because too many green bars may indicate weakening momentum.
$Apple (AAPL.US)$
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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