Confirming a Trend with MACD.

Let’s examine confirming a trend with MACD.

Let’s look at another chart so you can see how these crossover signals can sometimes give false signals.

False Signals or Fakeouts

We like to call them “fakeouts.”

On March 15, the MACD made a bullish crossover while the moving averages gave no signal whatsoever.

If you acted on that buy signal from the MACD, you just suffered a fakeout, buddy.

No Crossover

Similarly, the MACD’s buy signal by the end of May wasn’t accompanied by any moving average crossover.

If you entered a long trade right then and there, you might’ve set yourself up for a loss since the price dipped a bit after that.

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