Talking about technical analysis methods, have you understood the Moving Average Convergence Divergence (MACD)? Here's the review.
Moving Average Convergence Divergence (MACD)
The calculation is done by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA.
In terms of cryptocurrencies, MACD uses moving averages to determine the momentum of a cryptocurrency.
MACD was developed by Gerald Appel in the 1970s and is used by cryptocurrency traders to assess market momentum and identify potential entry and exit points, as well as price behavior.
The MACD line specifically tells traders when the 26-day EMA and 12-day EMA change compared to their original position.
Moving averages, which are used to calculate MACD, show the average value of past data over a certain period of time.
There are basically two types of moving averages, Simple moving averages and exponential moving averages.
The second approach focuses more on newer data, while the first approach considers all data to be equally important.
To calculate the MACD Indicator, two exponential moving averages are subtracted from each other and the numbers are plotted to produce the MACD line.
The MACD line is then used to calculate another exponential moving average that mirrors the signal line.
On the other hand, the MACD histogram shows the difference between the two lines. Both the line and the histogram oscillate below and above the line called the zero line.
Also read:
Erasure Coding: Definition, Uses, and Benefits
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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