MACD Crossover
📘 Summary
Indicators | MACD (12/26, 9) |
Chart Timeframes | 15M, 1H, 1D |
Long Entry | - The MACD signal line crosses the MACD line from below to above. |
Short Entry | - The MACD signal line crosses the MACD line from above to below. |
Suggested Exit Signal | - Fixed Stop-Loss/Take-Profit levels (e.g., 1% and 3%).
Or
- MACD signal line crosses the MACD line again. |
📚 Details
At the core of it lies the Moving Average Convergence Divergence indicator (MACD). The MACD is one of the widely used indicators when it comes to (crypto) trading. Basically, it is a combination of moving averages:
- The MACD line represents the difference between the EMA(12) and EMA(26)
- The signal line represents a very short-term moving average — the EMA(9)
Required Indicators
As discussed, you need only one key indicator:
- MACD (12/16, 9)
Chart Timeframes
This strategy is versatile across several chart timeframes, including 15M, 1H, 4H, and daily charts. Backtests showed a increase success rate on higher timeframes, such as the daily chart.
Entry Signals
Let’s have a look at the entry signals. The strategy provides a clearly defined entry signal for both long and short trades.
Long Entry Signal
Short Entry Signal
Obviously, the short entry is the opposite in terms of indicators.
Exit Signal
When it comes to the exit signals, you can have flexible approaches. However, make sure to define your exit strategy before you enter the trade.
Here are two options:
- Set fixed Stop-Loss/Take-Profit levels (e.g., 1% and 3%). You can backtest the best levels before executing your trade (Crypto OS offers a straightforward feature to backtest your strategies).
- You can also use the MACD crossover as exit signal. Accordingly, you close your trade with the next crossover.
Backtest Results
Despite the strategy’s simplicity, backtesting has demonstrated a remarkably a moderate success rate on average.
Depending on market conditions and chosen tokens, success rates of 60% and even 68% have been observed.
How To Apply The Strategy?
All indicators required for this strategy are available on TradingView, making it accessible for traders at all levels.
Crypto OS offers this strategy as a pre-defined signal for more than 200 crypto tokens, simplifying the process even further.