The video shares a strategy for using the MACD indicator by combining it with a long-term trend indicator. Crossovers on the MACD can indicate momentum, but should not be relied on alone, especially in a downtrend. Advanced traders can use price action with MACD to get an earlier entry signal.

The Best Strategy to Use with the MACD Indicator

Introduction
The moving average convergence divergence (MACD) is a trend following indicator that is popular among traders. In this video, we will reveal the best strategy to use with the MACD indicator.

Understanding the MACD Indicator
Before we start discussing the MACD strategy, it is essential to understand how the MACD works. The MACD consists of four components: the MACD line, the signal line, the histogram, and the zero line. The MACD line is faster and more sensitive to price changes than the signal line. The histogram represents the difference between the MACD line and the signal line. The zero line represents the center of the MACD indicator.

Using the MACD Indicator to Identify Momentum
Traders use the MACD to identify momentum by looking at the crossover between the MACD line and the signal line. When the MACD line crosses above the signal line, it indicates an upwards momentum, and when it crosses below, it shows a downwards momentum. The size of the histogram can also be used to determine the strength of the momentum.

MACD vs. Moving Averages
Many traders often wonder why they should use the MACD instead of moving averages. While both indicators serve similar purposes, the MACD gives a much earlier entry signal compared to moving averages.

Common Mistake Traders Make with the MACD
A common mistake traders make is using the MACD indicator by itself. As the MACD only shows short-term momentum, traders must also consider the long-term trend before placing a trade.

MACD Strategy for Beginners
A high win rate strategy for beginners is to combine the MACD indicator with a long-term trend indicator like the 100 EMA. Traders should only take signals when the MACD crosses over in the same direction as the long-term trend.

Advanced MACD Strategy: Combining with Price Action
For advanced traders, combining the MACD with price action can increase the win rate. Traders should identify a key level and wait for the price to approach that level. Then, they should use the MACD to confirm the downwards momentum before placing a short position.

Conclusion
When used correctly, the MACD indicator can be a useful tool for traders. By combining the MACD with other indicators and using it in the right context, traders can improve their win rate and make profitable trades.