Learn How to Setup and Profit Now with the Gunbot MACD Strategy
This article aims to explain how the Moving Average Convergence Divergence (MACD) Indicator works and how to set up a strategy in Gunbot and how to profit from manual trading using this trending indicator.
MACD Indicator Explained
By now, you should know that the acronym stands for Moving Average Convergence Divergence, and that is one of the most powerful and commonly used trend-following indicators because basically…
Helps you identify the direction of the market on both ways, either going up as a bull or down as a bear.
The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA.
MACD triggers technical signals when it crosses above (to buy) or below (to sell) its signal line.
Here is an example of the MACD indicator from a TradingView chart pic
Once you setup the MADC strategy in Gunbot, you have to keep in mind that the buy order is placed when the MACD line crosses up the signal line, and a sell order is placed when the MACD line crosses down the signal line.
Meaning that you will have to set the “DOUBLE_CHECK_GAIN” setting to “true” because the bot will buy or sell on the cross without checking for profit unless you set it to do so.
Gunbot MACD Strategy
It is best if you add the MACD default values to the Gunbot settings.
As a rule of thumb, always check the charts before firing the bot, just as you wouldn’t enter the trade unless you see conditions met on the chart before entering the trade.
Also, make sure the market is trending either up or down, avoid ranging market since the MACD is good only when a good momentum exists in the market.
I keep seen crypto traders fighting against the markets, so please don’t be one of them. At least try to understand how the market structure works.
What to Check Before Entering a Trade
There are 3 main questions you can ask yourself to properly decide when and if you enter the market; the first is obvious.
Is there a structure to the market?
The second question should be. Is the pair ranging or trending?
And finally, Is it at the top or bottom of the trend?
After accurately answering these questions, you will start finding success with Gunbot and profiting from your trades.
The market trends in 3 different directions at any given time; therefore, understanding when a switch occurs based on your choice’s timeframe is crucial to successful crypto trading.
In general, the 3 basic forms of market structure are “Bull-Trend“, “Bear-Trend” and “Sideways-Trend“
You can recognize a Bull Trend when you see Higher Highs and Higher Lows on the chart.
The bear trend can be seen when the price action shows a series of Lower Lows and Lower Highs.
And the sideways trend or ranging market is revealed when Equal Highs and Equal Lows are present on the chart.
Always double-check with a higher time frame (zoom-out), so you can see the direction from a better perspective and be sure the trend is what you expect.
You can also draw trendlines to check convergence or divergence between the price and the MACD indicator.
If you’re not using the Gunbot MACD Strategy and you want to do it manually, you can write a trendline on the MACD indicator and enter the trade when the price breaks above that trendline, so not only you rely on the cross, but on a breakout, this is a useful tip to filter out false signals.
You know how to set up the “Gunbot MACD strategy” and how to enter the trade manually, but never forget to Manage Your Risk.
After all, it is only by managing your risk that you can succeed as a trader. For this, you can use Stop Loss, Dollar Cost Average, or Reversal Trading with Gunbot.
In case you’re trading manually, the best approach would be to Stop Loss. Provided you had a good entry price, your stop loss should be smaller.
For Gunbot, you must have set up a gain percentage, and in case you’re manually trading, don’t forget to take profit at the cross. Always remember that “the trend is your friend until the end.”
Disclaimer: “This Is Not Trading Advice” is just my personal experience with the Gunbot MACD Strategy.
If you don’t own Gunbot yet, you can get it thru my reseller link, Get Gunbot from CryptoDROI Now, and you’ll Benefit from my unconditional help and support with the bot 🙂