1. What is the MACD indicator, and what is its purpose?

MACD is an indicator; it is a smoothed moving average indicator. It is a market trend indicator, a barometer for the direction of bulls and bears, and one of the important data indicators we use for trading, as well as one of the tools to assist with entries and exits. Very short-term trading mainly relies on MACD golden cross and dead cross patterns on the 1-minute, 5-minute, and 15-minute charts.

2. What are the MACD parameters?
The MACD parameters have two parts: DIF represents the fast line, and DEA represents the slow line.

3. Does MACD have a zero axis?
Yes, MACD has a zero axis. The zero axis represents the dividing line between bulls and bears; it is located at the midpoint position of the red and green bars.

4. How do you use the MACD parameters indicator?
1. When the DIF fast line crosses below the DEA, it indicates a dead cross has formed, which is favorable for the bears.
2. When the DIF fast line crosses above the DEA, it indicates a golden cross has formed, which is favorable for the bulls.

5. Summary of DIF and DEA crossover situations.
1. Both DIF and DEA are above the zero axis, and DIF penetrates upward through DEA; this is also called a double bull signal (golden cross). But DIF and DEA need to both lift upward at the same time, indicating bulls are especially strong, with the possibility of breaking to new highs again.
2. Both DIF and DEA are below the zero axis, and DIF penetrates downward through DEA; this is also called a double bear signal (dead cross). But DIF and DEA both move downward at the same time, indicating bears are especially strong, with the possibility of breaking to new lows again.
3. Both DIF and DEA are below the zero axis, and DIF penetrates upward through DEA; this is a deformed form of a golden cross. It indicates the market is shifting from weak to strong and the market is about to rise, but you still need to see whether it breaks above the zero axis.
4. Both DIF and DEA are above the zero axis, and DIF penetrates downward through DEA; this is a deformed form of a dead cross. It indicates the market is shifting from strong to weak and the market is about to fall, but you still need to see whether it breaks below the zero axis.
5. When DIF and DEA run in the same direction, a golden cross represents an especially strong bullish trend; a dead cross represents an especially strong bearish trend.
6. When DIF and DEA show a large-angle separation, it means the market is about to be “hit,” i.e., a waterfall move or a sky-piercing arrow. If a small-angle separation occurs, it means the market is entering a consolidation range with sideways volatility.

6. What is a rejection-style golden cross and rejection-style dead cross?
1. Rejection-style golden cross: DIF and DEA both move upward, about to cross and form a golden cross; when DIF suddenly turns downward at that moment, it indicates a rejection-style golden cross has formed, meaning you can look for bearishness in the short term.
2. Rejection-style dead cross: DIF and DEA both move downward, about to cross and form a dead cross; when DIF suddenly turns upward at that moment, it indicates a rejection-style dead cross has formed, meaning you can look for bullishness in the short term.

7. The “air refueling” pattern.
After DIF and DEA form a golden cross, during the upward movement, after passing through the zero axis, they suddenly become a dead cross; then they quickly form a golden cross again, returning above the zero axis. This indicates that the “air refueling” is over and a rapid upward move is about to happen; it also suggests that the pullback is for a better rally. The formation of a dead cross works the same way.

8. What is divergence?
Divergence is when the price and the indicator show opposite signals; we generally refer to this as divergence.
1. Top divergence indicates bears are coming.
2. Bottom divergence indicates bulls are coming.

9. How do you distinguish divergence?
1. Top divergence: The price makes a new high, but the MACD indicator does not make a new high; it remains at the original point or shows signs of moving downward. This indicates that the top-divergence move that appears is about to fall.
2. Bottom divergence: The price makes a new low, but the MACD indicator does not make a new low; it remains at the original point or shows signs of moving upward. This indicates that the bottom-divergence move that appears is about to rise.
3. Key point: When the price makes a new high or new low, but the MACD indicator does not make a new high or new low, it means divergence has occurred, and we should enter decisively.

10. MACD indicator settings:
①S:5 ②L:34 ③M:5#指标 #MACD #超短线