MACD Crossings- Coinrule Strategy of the Week 6
Recently, Coinrule has integrated a variety of new technical indicators. This week we look at a strategy that features one of them, the MACD. This strategy will enter trades when the MACD crosses above the signal line, and exit trades when the MACD crosses below the signal line.
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00:11
Hi there, and welcome to Coinrule’s Sixth strategy of the week video. In the past few weeks, we've integrated a breadth of new indicators here in Coinrule, including the MACD, Bollinger Bands, exponential moving averages, and open-high-low-close. This means that you will now be able to build these indicators into your strategies without the use of TradingView signals.
00:31
This week, our strategy will utilize one of our new MACD templates. This strategy uses the MACD in order to enter and exit trades. The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of an asset price. The MACD is calculated by subtracting the 26-period exponential moving average or EMA from the 12-period EMA. A result of that calculation is the MACD line. A nine-day EMA of the MACD line called the signal line is then plotted on top of the MACD line, which can function as a trigger for buying sell signals.
01:07
Traders may buy an asset when the MACD crosses above its signal line and sell or short the asset when the MACD crosses below the signal line. The MACD indicators can be interpreted in several ways. The most common methods are crossovers, divergences, and rapid rises and falls.
01:25
To enter trades, this strategy looks for a buy signal when the MACD crosses above the signal line. Just like in this example here, if you remember correctly, this is a bullish signal to us when we should be looking to buy.
01:38
To exit trades, we look for the MACD to cross below the signal line. If you're using one of our leverage exchanges, you'll also be able to use this as an entry for a short position.
01:48
Lastly, I'm going to show you on TradingView how this strategy works. And I'll also show you how to set it up on Coinrule. Right, so here we are on TradingView. We're looking at Bitcoin on the one-day timeframe here, and we've got the MACD at the bottom here. I've hidden the histogram just to clean up the chart a bit and make it a bit easier to read. This here is the MACD line, this blue line here. And this orange line here is a signal line.
02:14
So, you can see here, here's the point where the MACD crossed below the signal line. So, this could be an example of an entry point for a short position if you're using one of our leverage exchanges. So, if you come to here, and we check, if we entered a trade here a short position, we would have made a profit of around 19%, 19-20% Because the trade would have been closed at this point here when the MACD again crossed above the signal line.
02:41
So, we could also use this as an entry for a buy position or long position. So, let's see what would have happened. So, we can see here that this is where the MACD that, again crossed below the signal line. So, this would be where we would exit the trade. So here we would enter. And then we would close here at this bar. So, to give us a nice 4% profit on this trade. That's just an example of on the chart how the strategy would enter and exit trades.
03:05
So now I'll show you how to set up on Coinrule. So first, come to the rule, new rule page, and click on the exchange you want to use. I'm just gonna put on the demo exchange just for the sake of this example. Come to templates come to MACD at the end here. And you'll see here MACD crossings. So, click on this, you'll get a description of the strategy. Click on it and here we go. Here's the template. So, if any coin has a MACD crossing above the signal line, this is where a buy condition in a timeframe of I'm just gonna set this to one day, but you can play around with different timeframes just to see what works for you. Then I want to buy $1,000 of that coin with my USDT wallet as a limit order.
03:47
And then anytime, if that coin has MACD crossing and below the signal line at a timeframe of I'm going to set it to one day again. Then I want to sell 100% of the amount bought of that coin to my USDT wallet as a limit order. I want you to start immediately execute 100 times in total. I'm just gonna call this rule MACD crossings. So, it's as simple as that. Let's click Launch and launch demo. And there you go; your strategy is live. So, this is a lot easier than our previous strategies because we've already got it as a pre-existing template. So, it's just basically just click on it and you can run the strategy.