Many traders and investors use a combination of the MACD indicator with the Exponential Moving Average (EMA) to get a better entry confirmation
The application of the MACD indicator and the two EMA lines above show that the trend change from bullish to bearish is accompanied by a shift in the MACD area from the positive to the negative zone. The signal was then confirmed by crossing the MACD signal line below level 0, as well as the crossing of the two EMA lines (the big period EMA crosses the small period EMA from bottom to top).
How to read MACD indicator with EMA signal
The information obtained from how to read the MACD indicator is often used as an entry guide in forex trading. Traders will open sell when the area and the MACD signal line cross into the negative zone, as well as the EMA 26 and EMA 12 lines intersect. On the other hand, traders are prepared to open buy when the area and the MACD signal line cross from negative to positive, and EMA 12 cross EMA 26 from bottom to top.
Even so, you are still encouraged to look for complementary tools when trading forex with the MACD indicator. MACD signals that can provide various benefits in fact are not always 100% correct. So, it would be better if the MACD indicator is combined with other technical tools or methods, such as price action techniques, or chart pattern analysis.
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