In the past two days, there is a fundamental news worth our close attention. According to the data from the prediction market, the probability of the related bill passing is increasing. Once implemented, the changes in the market are easy to imagine.
How to efficiently track such events? There is a simple and free way. Friends who haven't installed the AiCoin App are advised to download it as soon as possible and remember to enable the app's push notification permission to receive news alerts.
News alerts will combine market hot cryptocurrencies with topics actively discussed within the community for interpretation, leaning towards practical applications. If the feedback is good, I will update this technical series more frequently in the future.
The core of this learning: MACD Cross Zero Line. MACD crossing the zero line can be divided into two common forms. The first is the red and green bars crossing the zero line, and the second is the DIF line crossing the zero line. Both types of signals have their uses. Today we will focus on dissecting the DIF cross the zero line, as this kind of signal has a stronger trend reference value.
We will take UNI as a case study. Choosing UNI is not a recommendation for this cryptocurrency; I want to clarify this first. UNI is the largest on-chain spot DEX, while HYPE is a leading contract platform. Recently, when Robinhood's popularity exploded, UNI returned to the market and the attention of major players. Reflecting on the DeFi market in 2021, UNI performed exceptionally well at that time. It is chosen for this demonstration solely due to its current high visibility and significant market fluctuations, making it suitable for illustrating indicator logic.
You can open your commonly used trading software and search for UNI. I have opened the UNI trading pair on Binance here.
DIF Cross Zero Line Usage
1. When DIF crosses above the zero line, it indicates a trend reversal to bullish.
2. When DIF crosses below the zero line, it indicates a trend reversal to bearish, requiring further signal confirmation.
Friends who worry about not being able to distinguish can directly use the recognition indicators I have written, which will provide signal prompts directly on the market. The practical effect is quite good. The screenshots above show the large cycle level; let’s switch to smaller cycles and take a look.
First, look at the 4-hour cycle. Relying on this set of indicators, even if unable to capture the entire trading segment perfectly, gaining significant profit from a large portion is still considerable. After a round of decline, we welcome a substantial increase.
Next, look at the 30-minute level, which will also output many operationally valuable buy and sell signals, with decent profit potential.
In the 5-minute short cycle, the effectiveness of the signals is still present.
The examples in different cycles above aim to show everyone that the logic of the DIF crossing the zero line is very friendly for capturing trend trading. If you want to truly understand the principle and don’t want to rely solely on ready-made indicators, you can also manually identify the DIF line with the naked eye without complex tools; just understanding the changes in the position of the lines is enough. Tools only help us save review time.
In trading, do not get overly hung up on the minute price differences at the entry point. Even if a trade yields a million-level profit, missing out on a few thousand will not change the overall profit result. It’s unnecessary to focus on extreme price points. Correct judgment of the larger direction is already sufficient.
After looking at UNI, let’s take a look at BTC. Later, I will share this set of indicators; those who need it can use it for signal judgment. For those who do not require tools, mastering the manual identification method is also entirely sufficient; once proficient, a glance at the K-line can reveal signals.
Let’s look at the BTC 4-hour market. Previously, after the DIF crossed below the zero line, a significant corrective market followed.
After this period of operation, the DIF is getting closer to the zero line. Perhaps after a few more K-lines, a critical crossing action will occur. This is also why I reminded everyone at the beginning to closely monitor the clear movements of the law bill. If the news aligns, once the DIF crosses above, it could possibly usher in a substantial opportunity. For the 4-hour BTC, we should wait for a strong confirmation signal.
Let’s look at BTC in the 5-minute short cycle, where this set of indicators also performs prominently.
Remember: The crossing of the DIF over the zero line does not produce a signal only at the moment a large bullish or bearish candle appears. Signals often appear in advance, giving us ample time to react and enter.
Having discussed the advantages of so many indicators, we must also objectively address their shortcomings to keep expectations in check. The biggest problem with this set of indicators is that they repeatedly issue false signals in ranging market conditions. Constantly opening and closing positions will chip away at transaction fees and test a person’s patience. Using it is like hunting; you will go through many trial-and-error attempts, but as long as you grasp one genuine trend, it will be enough to cover previous small losses.
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