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mirygorge:
Ohh nice thank you guys for recommendations

Libertex:

What Is Russell 2000 Index?

Stock indices are an important part of financial markets and provide information for a basket of stocks, not just one. Created in 1984, by the Frank Russell Company, the Russell 2000 index quickly became a household name.

While indices like S&P 500 act as a reference point for large-capitalization stocks, Russell 2000 reflects small-cap stocks in the United States.

Russell 2000 Definition

The Russell 2000 index measures the performance of approximately 2,000 smallest-cap American companies. The index is market-cap weighted, meaning the weight of its components changes relative to the total market capitalization.

The index is operated by FTSE Russell, of the London Stock Exchange (LSE) Group. The subsidiary also maintains other indices that it should not be confused with. The Russell 3,000 index lists the largest 3,000 US companies. The largest 1,000 companies, out of these, are listed on the Russell 1,000 index. The rest, which is small/mid-caps, is a subset of the smaller components within Russell 3,000 and belongs to Russell 2,000.

Understanding the Russell 2000 Companies



The constituents for Russell 2,000 are not chosen by a committee or the groups operating it. Instead, they are calculated according to a formula based on a combination of their market cap and current index membership.

Rebalancing takes place every June on the last trading day. The current composition includes 2,021 stocks; the top-10 companies are as follows:



Not all types of stocks are considered eligible to be included in the Russell 2000. These are the defining characteristics that all constituents must have – otherwise, they are excluded from the list:

- Must be traded on the U.S. exchanges
- No less than a $1.00 closing price on the rank day in May
- A total market capitalization of no less than $30 million
- More than an absolute 5% of shares available
- No royalty trusts, LLCs, limited partnerships, closed-end investment, and blank-check companies

Factors Influencing the Russell 2000 Index Price



Primarily, the value of the index is affected by whatever happens in the companies listed on it. Investors should also keep an eye on sectors reflected in the index constituents – it could be events occurring in healthcare, finance, technology, energy, etc.

Just like any financial asset, Russell 2000 does not exist in a vacuum. Therefore, multiple interrelated or even seemingly unrelated factors can play a significant role in its value. Since it is a barometer for the U.S. economy, the index receives influences by similar determinants: political news, market corrections, speculative behavior, dollar strength/weakness, demand for certain commodities, etc. It is also essential for traders to be aware of the U.S. geopolitical tensions with other regions, such as China, Middle Eastern countries, and South-East Asia.

Advantages and Disadvantages of Russell 2000

Before you can make the right decision on whether this type of trading is for you, thoroughly research the topic from both sides. Russell 2000 advantages include:

- Presents opportunities on the entire market rather than narrow sectors
- Outperforms bigger indices during periods of falling interest rates
- Offers a higher potential return for investing for investors
- Has the potential to grow easily

Here are the downsides of the Russel 2000 index:

- Associated with higher fees
- More volatile than large-cap stocks
- Appears to be slightly risky

What Is the Russell 2000 Index CFD Trading?



If you want to work with Russel 2000 or venture into financial markets in general, CFDs (Contracts for Difference) might be a match for you. But before that, you need to understand the technical side and consider its benefits as well as drawbacks.

What Is CFD Trading?

CFD is an instrument that lets traders speculate on the price changes across many financial markets such as indices, shares, currencies, bonds, etc. If you make correct predictions, you can profit from rising as well as falling prices.

The main difference of CFDs is that you never actually own the asset you are trading with. Instead of making the full physical purchase or sale, you mimic and receive the same profits (losses) as if you owned them.

Advantages and Disadvantages of CFD Russell 2000

Here are the main reasons to consider CFDs to make a profit on financial markets:

- Flexibility of trading in both directions
- Lower transaction costs
- Tax efficiency
- Ability to open trades with bigger value and leveraged gains
- Access to different types of indices and other assets

The negative aspects include:

- Inherent risks of trading in financial markets
- Leverage may amplify losses
- Not suitable for long-term strategies

Russell 2000 Stocks Trading Strategies

Typically, investors can rely on "financial rules of thumb” to provide guidance for investors. But an interesting fact about trading Russell 2000 is that conventional pearls of wisdom do not apply. With small-cap stock, it's advised to avoid the purest forms of market timing, unless you are a strategic and tactical investor:

- Bullish strategy – It has been noticed that small caps can outperform large ones in bull markets. However, you can expect periods of rising interest rates when the Federal Reserve stops decreasing to stimulate the economy.
- Bearish strategy – The most common advice on the time to purchase small-cap stocks is when the market seems to be going down for a long time. Active investors can benefit from buying at times when the Fed begins raising rates.

Conclusion

Adding small caps to your portfolio diversifies your investments, which is a universally accepted tactic. However, you should always be cautious about investing in any financial asset since past performance does not guarantee future results. Fortunately, platforms like Libertex make it possible to improve your skills without risking real money. By registering a free demo account, you can practice with whatever asset you want and then, you can enter the real market and maximize your gains.

Libertex:

What Are Gaps?

Generally, candlesticks on a Forex chart open at the same level where the last candle was closed after the end of the trading session. After that, a new candle is opened immediately.

That is what happens in typical situations. Despite that, when a gap performs on the chart, you see a possible divergence between the starting and the ending price of the two connecting candles.

A gap is a space of a chart where a security's rate changes with no trading activity happening in between.

What Is Gapping



Gapping is when a stock, or different trading tool, opens over or under the preceding day’s end, with no trading action in between.

For example, the share price picked at the level of $338.00 on Wednesday and opened at $356.40 on Thursday, and no trading happens in between this space. This unfilled interval looks like a gap on the chart.

What Causes Gaps in The Market?

Gapping in the market happens due to many factors. Here are the most common of them:

Political Events



Some of these events are essential. For example, the US dollar has decreased slightly after trading steady among other global currencies, presenting a small gap, after revealing the news about Trump’s impeachment. On 19 December 2019, the US dollar index DXY was trading at the level of 97.33.

Economical Events

Significant economic moves can change not only a single position on the Forex market. Some of them can affect the global economic landscape, such as Black Wednesday. In 1992, between September and December, the GBP/USD declined by about 25%, down to the level of 1.5057. Furthermore, there was no trading activity in that period.

Natural Disasters

The result of a natural disaster may cause a catastrophe for a country. Earthquakes, floods, and hurricanes hurt country's residents, confidence, and infrastructure. Besides, such disasters will also harm a nation's official currency.

For example, Harvey Hurricane had led to instability at the absolute worst time for the markets. A previously weak dollar dropped to a one-and-half-year low against a currency basket.

The USD index was falling at 92.501 value by 28th August 2017 and had earlier dropped to 92.372. It was the lowest position since early May 2016.

In brief, gaps are mostly built by significant changes, making it all the more valuable for traders to remain refreshed by the economic program, as well as other geopolitical matters.

Gap Types



There are four types of gaps, excluding the gap that happens because of a stock reinvestment. Each type has its unique implications, so it is crucial to be able to select between them.

Common Gaps



They can develop from a stock reinvestment when the trading volume is low. These gaps are common and typically get filled almost immediately. "Getting filled" means that the price action, in the last few days or weeks, usually returns at the least value to the previous day before the gap. It is also known as closing the gap.

A common gap appears typically in a range-bound or congestion zone, where it strengthens the apparent absence of interest in the stock at that time. It is frequently increased more by a low trading volume.

Being conscious of these types of gaps is useful, but it's questionable that they will provide trading opportunities.

Breakaway Gaps



It’s a new trend where the asset ‘gaps away’ from the price pattern. If a breakaway gap is followed by higher trading volume, it may be deserved to get a position long for a breakaway gap up, and short for a breakaway gap down, on the candlestick next to the gap.

Runaway Gaps



Runaway gaps may be termed as gaps caused by a raised interest in the stock. Runaway gaps usually describe traders who did not get in through the first move of the uptrend and, while waiting for a temporary reversal in price, decided that it wouldn’t happen.

Elevated buying interest appears suddenly, and the price gaps over the past day's ending. This kind of runaway gap describes a state of traders’ panic. Also, a good uptrend can have runaway gaps caused by significant news and events that produce new interest in the stock.

Exhaustion Gaps



In contrast to runaway gaps, there are occasions when the price does a final gap in the trend course, but then shifts. It is frequently caused by a crowd mentality of traders racing to the trend and pushing the stock into the overbought area.

Accordingly, skilled traders will be waiting for the withdrawal and get the opposite position to the previous direction.

All of these kinds of gaps can be full or partial gaps. Common gaps are usually partial gaps, as the rate doesn't move substantially. Though, in some cases, the cost may not change much; nevertheless, in the end, it will do a full gap. Breakaway, runaway, and exhaustion gaps conduce to become full gaps.

Gaps are classified as breakaway, exhaustion, common, or continuation. Classification is based on when they happen in a price pattern and the meaning of the signals.

Gap Trading Basics

After you’ve got acquainted with the various types of gaps, we will go on by telling you about a few strategies for trading gaps in Forex.

First, when trading gaps, it is essential to learn that price may not start rapidly moving in the expected place. In many cases, a healing move will arrive, filling part, or the entire gap space. Otherwise, you may even feel a false signal made by the gap. Let's review some different Forex gap trading methods, which will help you in making the decision.

Gap Trading Strategies

Some traders use gaps for analytics. For example, if a gap happens almost at the start of a trend, then it is a breakaway gap or a runaway gap. It lets the trader understand the price possible so he/she can run. Other traders use gaps for trading objectives. They may open positions after a gap happens. Let's take a look at some of the most effective strategies.

Buying the Gap



Traders usually notice this strategy as the "gap and go". A position could be taken at the moment the stock gaps with a stop order traditionally placed low under the gap bar. The gap should happen above a critical resistance and trade on heavy volume to enhance the possibilities of a successful trade. And conversely, traders could remain for prices to fill the gap and set a limit order to buy the stock almost before the preceding day's ending.

Selling the Gap



This strategy is related to the previous one. In this case, the trader opens a short position following a gap down.

Fading the Gap



Contrarians may apply a fading strategy to use gapping. Traders can get a trade in a different area of the gap, under the assumption that most gaps tend to be filled over time. A stop order is placed over the gap bar's high, developing a gap up, with a profit mark set near the preceding day's ending. For a gap down, the trader purchases put a stop loss under the gap bar's low and set a profit target near the previous day's close.

Gaps as An Investing Signal



Breakaway and runaway gaps can both indicate that there is more trend left to hold.

Consequently, following one of these gaps, a long-term investor may open a position in the area of the gap (usually watching for gaps above).

They may hold onto the trade until an exhaustion gap happens or till a trailing stop is gone, giving them a reason to quit.

There are three main trading strategies: Buying the Gap, Selling the Gap, and Fading the Gap.

How to Play the Gap in The Forex Market

Let's review all steps, using the example of common or weekend gaps. Forex fans trade the weekend gap by requiring Sunday's opening price to be a replacement for Friday's closing price. Here is one of the Forex gap trading strategies:

1. Open a chart with the common gap
2. Find a chart pattern
3. It will be nice if there is a nearby gap midnight
4. Following the price gaps, place the first candle above or below the base of the gap
5. Enter quickly (aggressive entry) or enter at the recess of the candle high (conservative entry)
6. Stops are set under or over the candle high/low
7. The target is the gap close or three pips above/below it

Gap trading is complicated, but if you understand which gaps are tradable and which are not, it should be more manageable. Try to find different gaps on your chart and examine how the price works after the creation of a gap. Finally, yet importantly, always keep the risks under control!

Tips and Tricks for Gap Trading



So, everyone's favorite part is tips and tricks. Here are the essential tips you need to learn when trading gaps:

- Be assured to watch the volume. High volume should be near the breakaway gaps, while low volume should happen in exhaustion gaps.
- In some cases, you will see that a gap happens within the structure of a classical chart pattern. When this occurs, it is essential to use a multiple period method and zoom into the lower timeframe. You will get a more visible picture of the chart pattern and, therefore, accurately control the trade.
- As price is running in your favor, focus on price interactions with the pivot points, particularly on the first interactions of the Pivot Point (PP), S1, and R1 Levels.
- If the price breaches a pivot point in the way of your trade, next, you should hold the trade, in expectation of a continuation of the pivot, until the next critical swing level or pivot level is examined. Still, if the price jumps sharply from a pivot point zone, you need to quit your trade and to get your open trade profits.
- When you start your trading day as a large gap trader, you will need to look for essential rates in the premarket price action to trade against. It will assist you in preparing for the trade and give you an advantage when things become real and working.
- For those traders who play large gaps, you will usually get useful information on daily charts. While browsing daily charts, look for spaces of more extended support and resistance. It will assist you in identifying large gaps where you can take the upper hand.

It's also essential when you trade with a small size. Large gappers can be hugely active. It means you can waste a lot of money immediately if you aren't armed.

Conclusion



Now, when you understand what large gap trading is and how you can take the upper hand, you should start practice trading. Discovering how to trade large gaps properly before you work with real money will encourage you to become a more skilled trader without risking your money.

So, you can easily use all of the provided knowledge in trading with Libertex.

Firstly, it’s a very profitable solution. You can trade stocks, indices, currencies, metals, and energy without any hidden fees.

Secondly, it’s simple; there is no need to understand the terminology, lots, and spreads.

Thirdly, you can get a convenient solution by blending all of the trading instruments into one platform.

Finally, Libertex provides the ability to trade from anywhere in the world, anytime you want. All you need is a laptop and a sober mind.

Ready to apply the acquired experience and knowledge in real trading? Register a free demo account right now!

Libertex:

Libertex adds a hot CFD pair as the crypto dog fight hots up

They say every dog has its day. Well, there are currently not one but two puffed-up pooches in the digital spotlight, and neither one of them looks ready to step aside. Believe it or not, the entire crypto community has gone barking mad over these two tokens based on the same famously cute Japanese dog breed. Of course, we're talking about the prolific Dogecoin (DOGE) and Shiba Inu (SHIB), which have both seen spectacular growth in recent months. After much anticipation, Libertex has finally added CFD on this pair of pups to their list of tradable assets. All that's left for you to do now is decide which dog you want to back in this particular fight!

Many of you know that both Shiba Inu and Dogecoin started their lives with low expectations. One was launched as a deliberate joke and the other as a parody of that same joke. Now, their creators are still laughing…just all the way to the bank. That's because these two canine capers have – against all odds – made it into the top 10 largest cryptocurrencies by market cap to join legacy contenders like Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP). If the long-term performance of meme stocks like GameStop is anything to go by, these two coins could be a smart addition to your crypto portfolio. But before you can make your choice, you'll naturally need to see how these pups stack up next to each other.

Dogecoin: a technical overview

In many ways, Dogecoin works just like Bitcoin. Both networks are blockchain-based and verify transactions using proof of work consensus. That said, Dogecoin has some advantages of BTC for everyday payments since its transactions have faster processing times and lower costs than Bitcoin ones.

Dogecoin also has a much higher circulating supply than Bitcoin. DOGE's supply is theoretically limitless. With over 129 billion already in circulation, the supply is far more abundant than Bitcoin's 21 million capped maximum. Then, there's the issue of block rewards: 10,000 Dogecoin are mined every minute in the form of miner compensation.

As mentioned already, DOGE is a proof-of-work cryptocurrency, which means it shares many parallels with Bitcoin regarding how it uses computing power to secure its blockchain. What's more, DOGE is merge-mined with Litecoin. The upshot of this is that any miner of Litecoin or Dogecoin can choose to mine the other currency, stabilising its network power compared to solo-mined coins.

What about Shiba Inu?

The differences between these two pups start with the very system they operate, with Shiba Inu serving as a token on the Ethereum network. SHIB is what is known as a fungible token, which is assigned the ERC-20 protocol. Amid their widespread fame of late, many of you have undoubtedly heard of non-fungible tokens (NFTs), but these use the ERC-721 token standard.

The biggest advantage of being Ethereum-powered for Shiba Inu is multiplying smart contracts to generate its own decentralised financial products. DeFi has gained traction this year with tokens like yearn.finance, Uniswap and Aave, exploding in terms of price and adoption. Cryptocurrencies use smart contracts on Ethereum's blockchain to create decentralised exchanges (DEXs), lending protocols and even interest-bearing accounts. This could be a huge growth vector for SHIB going forward and certainly gives it an extra point for utility.

Shiba Inu has even made a foray into the NFT space with Shiboshis, a limited supply of 10,000 NFTs based on its Shiba Inu mascot. The decentralised programme leverages Ethereum's network to allow artists to auction off NFTs, supplanting the third party needed for transactions with smart contracts.

All about supply

Before looking at each coin's market performance and prospects, it would be remiss not to cover how SHIB and DOGE are issued and managed. After all, crypto coins and tokens are effectively currencies like the dollar or pound, and their supply (including its growth potential) is a huge factor determining yields on capital investment.

Let's start with the older of the two, Dogecoin, launched initially with a limited supply of 100 billion coins. By 2015, every last Dogecoin was mined, so the supply limit was changed so that a further 5 billion coins could be mined every year. Now, there's no established limit to how many Doge can be produced, meaning that DOGE is inherently inflationary. That said, as long as mining parameters remain unchanged, the inflation rate will decrease as a function of the extra coins in circulation.

Moving on to Shiba Inu, whose supply system is very different. Right from the outset, the total possible supply of SHIB was set at one quadrillion, after which 50% of the tokens were sent to crypto exchange Uniswap, with the other 50% given as a "gift/tribute" to Ethereum founder Vitalik Buterin. Interestingly enough, Vitalik opted to burn 90% of his SHIBA, donating the remaining tokens to the Indian Covid Relief Fund. SHIBA can't be mined to complicate matters further, and a portion of it is destroyed every time someone buys the token.

As such, SHIB differs from DOGE in being a deflationary currency, which should theoretically make it more likely to rise in value over time compared to its older rival. Remember that both of these coins have skyrocketed recently, and current valuations could thus be inflated.

What the charts say

As we've already touched upon, to say that these puppies have grown up incredibly quickly would be an understatement. SHIB, for instance, shot up by over 8,000% in the space of six months to reach $0.00008 in late October. Dogecoin, meanwhile, eclipsed even Shiba's impressive growth spurt, rising 12,000% from January to May 2021. Many astute investors would naturally expect a correction to ensue after such an incredible run. And that's what happened. Both coins are now down 50% and 65%, respectively, making them tempting buys just now. That's right, SHIB is currently hovering around $0.00004 per token, with DOGE available at a knockdown price of $0.38 at the time of writing. With both technical and fundamental factors suggesting a return to growth in the medium term, now could be a great time to add either one (or indeed both) to the portfolio.

Trading CFDs on SHIB and DOGE with Libertex

You guessed it, both these puppies are now available for trading on the award-winning Libertex trading platform, along with numerous other cryptocurrencies and digital assets. The only question that remains is which you think will prove the top dog? Truth be told, you shouldn't feel under pressure to pick a pup as both these assets could well have a place in a balanced and diversified investment portfolio. What's more, Libertex's new SHIB/DOGE CFD pair allows you to fight the competing dogs against each other. Choose your dog and Trade for More!

Libertex:

MACD Indicator - Your Multifunctional Indicator

When you ask traders to name a good technical analysis indicator, no matter if they are newbies or professionals, they will undoubtedly mention the MACD indicator. MACD is one of the widely-used indicators that has many advantages.

The crucial benefit is that it gives many signals and can be used in different circumstances. Moreover, it’s free and doesn’t require any downloading. You can simply find it in MetaTrader and apply it to your chart. Let’s take a closer look at the best indicator’s implementation.

What Is the MACD Indicator?

MACD stands for Moving Average Convergence Divergence. It’s a momentum indicator that follows the trend and shows the correlation between two moving averages of the asset’s price.

Here, we need to clarify what the momentum indicator is. A momentum indicator calculates the change or speed of the price movement of the asset.

MACD indicator was developed by Gerald Appeal in the late 1970s. If the indicator is used for so many years, we don’t need any other proof of its effectiveness.

Look at the picture below. The MACD indicator consists of 2 lines: MACD and signal line, and one histogram (bars). A histogram is used to show the difference between the fast and slow moving average. Thus, when the distance between EMAs increases, the histogram rises. It’s called divergence. As soon as moving averages get closer, the histogram reduces. It’s called convergence. This explains why the indicator is called the Moving Average Convergence Divergence.



Calculation of Moving Average Convergence Divergence

The formula of the MACD is simple. MACD is a subtraction of the 26-period Exponential Moving Average (EMA) from the 12-period EMA.

MACD = 12-period EMA – 26-period EMA

If you don’t know what the Exponential Moving Average is, there is a simple explanation. EMA is the moving average that puts a greater weight on the most recent price points. That helps this type of moving average to stronger react to the recent price changes.

However, when setting the MACD indicator, you will see three numbers. For example, 12, 26, and 9, which are default settings. As we said above, MACD is the 12-period EMA minus 26-period EMA. MACD signal line is the 9-period EMA. MACD histogram is the MACD minus the MACD signal line.

How to Implement the MACD Indicator

This indicator is a standard tool in MetaTrader. That means you don’t need to buy it or download it additionally:

1. Go to MetaTrader
2. Click Insert – Indicators – Oscillators
3. Pick MACD

If you use any other platform, it’s likely that the indicator will be set by default. If not, you can always download it for free.
In the settings window, you can change the periods of the moving averages price, from close to open, high, low, and, of course, style. We would recommend you keep the close price. Also, you can change the MA periods. Remember that longer periods are better for bigger timeframes, while shorter periods are better suited to smaller ones.

How to Read the MACD Indicator

We are at the most important point of this article. Let’s look ar what signals the MACD indicator gives.

Crossover

The first and most common indicator function is the buy/sell signal. A buy signal appears when the MACD line breaks above the signal line. A sell signal happens when the MACD crosses the signal line upside down. The signal will be more influential within the sharp trend. In the case of a weak trend, the signal may turn out fake as the market will turn around.



Overbought/Oversold Zone

Don’t forget that MACD is an oscillator so, one of its functions is to determine market conditions. Both lines will be the crucial point you should consider. If they form significant tops or bottoms, it’s a sign of a close correction. There is no need to mention any specific level. You will understand when the rise or fall is more significant than usual.

If the lines reach the top, it depicts that the asset is overbought. Wait for the reversal down. If they form an extreme low, wait for a reversal up. In this case, you can combine the MACD with the RSI to get additional confirmation.



Zero-Line Crossover

Pay attention to the MACD histogram. If it rises above the 0 level, it’s a signal of the upward trend. If it falls below the 0 line, consider opening a short position. However, be careful. The signal works in a strong trend. In times of high volatility, the histogram can move up and down frequently, and that will lead to fake signals.



Convergence/Divergence

A MACD divergence/convergence is a difference between the direction of the price and the indicator. Bullish convergence happens when the price forms lower lows, while the MACD histogram sets higher lows. It’s a buy signal. Bearish divergence is formed, when the price sets new tops, while the MACD indicator’ extremums become lower. It’s a sell signal.



Benefits and Limitations of the MACD Indicator

Everything has two sides, and indicators are no exception. No matter how great the indicator works, it will have something that will affect its effectiveness.



Why MACD Indicator Matters 

MACD indicator signals traders whether a bullish or bearish movement is strengthening or weakening. It’s an important point. By having this knowledge, you will avoid unprofitable trades. The significant number of the applications makes the MACD indicator an irreplaceable trading tool.

Bonus. How to Avoid Mistakes Trading with MACD

There is no perfect indicator. Any indicator can give fake signals. However, sometimes the reason is not in the indicator – it’s in the trader. The lack of experience and understanding creates additional mistakes.

Histogram

The first mistake you can face is the wrong interpretation of the MACD histogram. What does the histogram show? It shows whether the market is bullish or bearish and the strength of either bulls or bears.

Some traders think that when the histogram rises significantly, showing the power of the buyers, it’s a good signal to buy. However, it will likely be a late signal. If the histogram shows the strength of either bulls or bears, it means that the recovery may happen soon. Thus, it’s too late to enter the current market. The best time to open a position is when the histogram is near the 0 level.

Crossover

The MACD crossover works well on a strong trend. However, you should remember that the market changes its direction quite often, especially on short timeframes. Thus, the crossover signals will not be accurate if the trend is weak.

Bonus. MACD Strategy: Follow the Trend

Here is how you can use MACD in trading:

1. The first step is to wait for the MACD to form a higher swing high. It’s essential the price forms the higher swing high, too. After that, we should look for a lower swing high. Again, the lower swing high of the indicator should be confirmed by the lower swing high of the price.
2. After we get two swing high points of both price and indicator, we need to connect them with a trendline.
3. The third step is to wait for the MACD breakout. The MACD line crossing the signal line from bottom to top is not enough. The indicator should break above the trendline we drew. It will be the entry point. Open a long position as soon as the MACD crosses the trendline bottom-up.
4. Remember about the stop-loss order. You should place the stop loss 5-10 pips below the latest low swing of the price.
5. Now, you need to wait for a good exit point. Close the position as soon as MACD crosses the signal line in the direction opposite to the entry point. It means from top to bottom. However, don’t close the trade immediately as soon as you notice the MACD crossover. Wait for a candlestick to close to be sure the crossover happened. Then you can close your position.

You can use the same rules but in reverse to open a short position.



Conclusion

We can say that the MACD indicator is one of the oldest, most effective, and easiest indicators you can apply for profitable trading. The most significant advantage is that it is multifunctional. If you read our article carefully, you remember that there are four situations when the indicator gives signals. Compare this number to other technical indicators, and you will understand that it’s a lot. The indicator can easily be applied to any timeframe. Thus, you can use it for any of your trading strategies.

It’s time to practice! Use the Libertex demo account to experience the advantages of the Moving Average Convergence Divergence indicator.

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