MACD, also known as the exponential smoothing moving average of convergence and divergence, is a technical indicator based on the secondary calculation of the moving average price. It is a general trend indicator; it consists of the long-term moving average MACD, the short-term moving average DIF, and the red energy column. It consists of five parts: (long), green energy column (short), and 0 axis (long-short dividing line).

It uses the intersection of the short-term moving average DIF and the long-term moving average MACD as a signal. The cross signal generated by the MACD indicator is relatively slow, but when used to formulate corresponding trading strategies, the effect is better. In specific applications, MACD mainly includes golden cross and dead cross, zero axis, divergence and so on.

MACD basic application method (see picture):

1. MACD Golden Cross: DIFF breaks through DEA ??from bottom to top, which is a buy signal.

2. MACD dead cross: DIFF breaks through DEA ??from top to bottom, which is a sell signal.

3. MACD green turns red: MACD value changes from negative to positive, and the market turns from short to long.

4. MACD red to green: MACD value changes from positive to negative, and the market turns from long to short.

5. When DIFF and DEA are both positive, that is, when both are above the zero axis, the general trend is a bull market. If DIFF breaks through DEA ??upward, you can buy.

6. When DIFF and DEA are both negative, that is, when both are below the zero axis, the general trend is a short market. If DIFF falls below DEA, it can be sold.

7. When the DEA line deviates from the K-line trend, it is a reversal signal.

8. DEA has a higher error rate when consolidating the situation, but if combined with RSI and KD indicators, the shortcomings can be appropriately compensated.