KapitanKris
Education

Using MACD and RSI to find entry and exit points

BINANCE:ICXBTC   ICON / Bitcoin
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20
This is just a simple way to use RSI combined with MACD to find entry and exit points.
We are looking at ICON (ICX) a very promising Korean project.

When the RSI enters the oversold regions (<30), this indicates a good time to buy. Conversely when the RSI enters the overbought region (>70), this indicates a good time to sell (or hold if you are keeping it as a long term investment).
This can be used with the MACD:

The blue line on the MACD is the short term Exponential Moving Average ( EMA ), which shows the average price over the previous 12 days, however, it gives more weight to recent data. This means it is better at showing recent momentum changes.
The orange line is the Simple Moving Average ( SMA ) over a 26-day time period (add all the close prices for the previous 26 days and divide by the number of data points = 26).

So when the RSI enters an overbought region and the EMA changes angle to a positive slope, this is a good indication to buy. You could wait for confirmation using candles from the next 2 sessions or wait for the EMA to cross the SMA , calleed the "Golden Cross" when crossing upwards. Conversely when the RSI enters an overbought region, and the EMA changes from an upwards slope to a downwards slope, this is an indication to sell. Again you could wait for confirmation from candles or from the EMA crossing the SMA downwards, known as the "Death cross".

Comments

Great article thank you! There’s a correction to be made tho in the last paragraph... the first scenarium is when the RSI enters an OVERSOLD area right?
+4 Reply
What range of time should I use when using these indicators? Im confused because as I change the ranges between 1 day or a week chart then the MACD and RSI change A LOT giving different msgs. Which range is the best one to choose when you are deciding an entry point?
+2 Reply
theres a typo on oversold/overbought which is confusing.
+2 Reply
Really cool!
Reply
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