Hey traders! If you’re diving into the world of auto trading, you’ve probably heard of the MACD (Moving Average Convergence/Divergence) indicator. One of its key components, the signal line, is a powerful tool you can use as a momentum filter.
Let’s break down how to effectively use the signal line for your trading strategies:
- Buy Logic: Activate your buy signals when the signal line is above the 0 level and the latest bar of the signal line closes higher than the previous bar. This setup naturally includes those upward crossovers that we love to see!
- Sell Logic: On the flip side, enable your sell signals when the signal line is below the 0 level and the last bar of the signal line closes lower than the prior bar. This too captures those downward crossovers that can signal a good time to sell.
By keeping these criteria in mind, you can enhance your trading strategy and navigate the markets with more confidence!
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