Binomo offers numerous trend oscillators and one of them is the MACD indicator. The MACD indicator is one of the most used trend indicators as it not helps us to identify the trend but also helps to verify the strength of the trend. In this blog, I am going to cover everything about the MACD indicator and how you can use the MACD indicator on the Binomo trading platform.
What is the MACD Indicator?
MACD Indicator or you can say (The Moving Average Convergence Divergence) is a popular technical analysis tool that helps us to identify upcoming trends, divergence, & convergence. This indicator was created by Gerald Appel in 1970. This indicator is a trading system in itself that not only helps us to identify the trend using the moving average but also helps to verify the strength of the trend using Histogram lines.
Unboxing MACD Indicator
To unbox the MACD indicator firstly, login to your Binomo account. You can use this indicator on the Binomo demo account. Once, logged in click the indicator button at the bottom left of the page. now, search and select the MACD indicator from the list.
Lastly, A configuration button will open. here, you will see the important components of the MACD Indicator. such as:
MACD line: MACD line is the fast line and is the difference between 12-period and 26-period moving averages.
Signal line: The signal line is a slow line and is the 9-period moving average this line is considered slower than the MACD line
Histogram Line: It is the difference between the MACD line and the Signal line. When the MACD line is above the signal line the histogram line is positive and vice versa when the MACD line is below the signal line the histogram line is negative.
You can change the periods and colour of the indicator lines and once you are done click apply.
How to use the MACD indicator on the Binomo trading platform?
There are multiple ways of using the MACD indicator on the Binomo trading platform.
- Crossover: This is the traditional way of using the MACD indicator. when the MACD line intersects above the signal line consider placing a buy trade conversely, when the MACD line intersects below the signal line consider placing a sell trade.
2. Histogram: You can solely use Histogram lines or you can consider placing trades with the combination of MACD line and Signal line. when you see green histogram spikes above the midline it signals a strong bullish trend and you can consider placing a buy trade conversely when you see the red histogram spikes below the midline it signals a strong bearish trend and you can consider placing a sell trade.
3. Convergence & Divergence: You can even use convergence and Divergence to place trades. In Divergence, when the indicator line and the candles are moving in the opposite direction it signals an upcoming trend reversal. Conversely, In Convergence, when the indicator line and the candles are moving in a similar direction it signals a continuation of a trend and you can continue with your previous calls only.
I hope you have understood the concept of the MACD indicator. If you still have any issues do comment below. I will highly suggest you try this indicator on the Binomo demo account and once you are confident enough shift to Binomo real account.
I wish you the best of luck 🙂