Machine Learning trading works just fine for large hedge funds that make thousands of trades per day. However, private traders just don’t have the facilities to run machine learning models with millions of parameters on real time. This is why private algorithmic traders, use technical indicators to make automatic trades.

What is MACD?

The technical indicator I will use today is MACD, Moving Average Convergence Divergence, is a momentum indicator, that shows the relationship between two moving averages. The MACD is calculated by subtracting the 26-period EMA from the 12-period EMA.

This MACD line is plotted on a signal line (9-period EMA). The intersections of these two lines are the signals of the MACD indicator. If the MACD indicator intersected into the signal line from below, it would be an uptrend. If the MACD indicator intersected from above the signal line, it would be a down-trend.

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