This method involves the MACD indicator, which helps recognize potential momentum shifts through signal analysis.
The Moving Average Convergence Divergence (MACD) is a technical tool that assists traders in identifying possible variations in an asset's momentum. This indicator focuses on the convergence and divergence of two exponential moving averages, usually a 12-period EMA and a 26-period EMA. Traders employ the MACD to determine if an asset is likely to undergo a bullish or bearish movement or experience trend reversals. A buy signal occurs when the MACD line moves above the signal line, while a sell signal happens when the MACD line crosses below the signal line.
Utilizing the Indicator
Gunbot initiates one position, either long or short, and concludes it when the target has been met. If the stop is triggered before successfully ending a trade, Gunbot will establish a stop order at a loss. Once a position is closed, Gunbot will seek to initiate a new long or short position. Gunbot will not add to preexisting open positions.
Long Position Conditions
A long position may be initiated when the MACD line ascends above the signal line.
Short Position Conditions
A short position can be opened when the MACD line descends below the signal line.
A position is terminated when the desired Return on Equity (ROE) is achieved. This value is a percentage derived from the entry point, factoring in leverage.
A position is closed at a loss when the negative ROE meets the STOP_LIMIT objective.