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