MACD / Owl of Profit

MACD Strategy

This strategy uses the MACD (Moving Average Convergence Divergence) indicator to identify potential trade opportunities based on bullish and bearish crossovers.

Features:
MACD Components:

MACD Line: The difference between the fast and slow exponential moving averages (default: 12 and 26 periods).
Signal Line: A 9-period EMA of the MACD Line.
Histogram: The difference between the MACD Line and Signal Line, representing momentum strength.
Crossover Logic:

Bullish Crossover: When the MACD Line crosses above the Signal Line, indicating upward momentum.
Bearish Crossover: When the MACD Line crosses below the Signal Line, indicating downward momentum.
Entry and Exit Logic:
Long Condition:

Triggered on a bullish crossover (MACD Line crosses above the Signal Line).
Closes any short position before opening (or adding to) a long position.
Short Condition:

Triggered on a bearish crossover (MACD Line crosses below the Signal Line).
Closes any long position before opening (or adding to) a short position.
Visualization:
MACD Line: Displays momentum trends.
Signal Line: Helps confirm trend reversals.
Histogram: Visualizes the strength and direction of momentum.
This strategy is straightforward and effective for momentum trading, ideal for traders looking to capture trend reversals and ride momentum shifts. Use it for backtesting and adaptation to your trading style.

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Happy trading!