📈 MACD + RSI Strategy for Smarter Stock Trading
Looking to improve your stock trading signals? Combining two powerful indicators — MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) — can help filter false signals and improve your accuracy. In this blog, you'll learn: What MACD and RSI are How to use them together in a trading strategy Python code to backtest this strategy 🔍 What is MACD? MACD helps detect trend direction and momentum. MACD = EMA 12 − EMA 26 \text{MACD} = \text{EMA}_{12} - \text{EMA}_{26} MACD = EMA 12 − EMA 26 Signal line = 9-period EMA of MACD Buy signal : MACD crosses above signal line Sell signal : MACD crosses below signal line 💡 What is RSI? RSI detects overbought/oversold conditions. RSI = 100 − ( 100 1 + R S ) \text{RSI} = 100 - \left( \frac{100}{1 + RS} \right) RSI = 100 − ( 1 + RS 100 ) Buy signal : RSI < 30 Sell signal : RSI > 70 ⚙️ Strategy Rules (MACD + RSI Combo) Buy when : MACD crosses above the Signal Line ...