MACD Technical Analysis Buy and Sell Trading Signals
Since the MACD indicator uses 26 and 12 EMA to plot, we shall compare these two EMAs with the MACD indicator to determine how these buy & sell commodity signals are generated.
MACD Commodity Indicator - Example of MACD Technical Indicator
The MACD indicator is a leading indicator meaning it generates commodity signals that are leading compared to commodities price action as opposed to lagging indicators that lag behind the commodities price.
Buy Commodities Trade
A buy commodity trade is generated when there is a MACD fast line crosses above signal line. However, as with any leading indicator these commodity signals are prone to whip-saws/fake outs.
To eliminate the whipsaws it's good to wait for confirmation of the buy or sell commodity signals. The confirmation commodity signal is when the two lines cross above the zero mark, when this happens the buy generated is a reliable commodities trading signal.
In the commodity example illustrated and explained below, the Moving average commodity indicator generated a buy commodity signal, before commodities price started to move up. But it wasn't until the MACD moved above the zero line that the buy commodity signal was confirmed, and the Moving Averages also gave a crossover commodity signal. From experience it's always good to buy after both the MACD lines move above zero center line mark.
Where to Buy using MACD Commodity Trading Indicator - Buy Trading Signal
Sell Commodity Trade
A sell commodity signal is generated when there is a MACD fast line crosses below signal line. However, just like the buy commodity signal, these are also prone to whipsaws/ fake outs.
To eliminate the whipsaws it is good to wait for confirmation of the sell commodity signal. The confirmation is when the two lines cross below the zero mark, when this happens the sell generated is a reliable commodities trading signal.
In the commodity example illustrated and explained below, the Moving average generated a sell confirmed after MACD moved below the zero line at the same time that the Moving Averages gave a crossover commodities trading signal.
Where to Sell using MACD Commodity Indicator - Sell Trading Signal
