The Basics of Chart Auxiliary Indicators - Bollinger Bands and MACD

When investing in financial products, people generally rely heavily on fundamental analysis and technical analysis to decide when to buy and sell.
Fundamental analysis is analysis that evaluates a company's value, and technical analysis can generally be seen as analyzing charts.
Let's study the Bollinger Bands and MACD indicators, representative auxiliary indicators on the charts provided by financial companies.
Please note that we plan to post articles on other auxiliary indicators in the future as well.

Bollinger Bands indicator
1. Basic structure :
- Consists of 3 lines: a middle line, an upper line and a lower line
- The difference between the upper and lower lines is called the band width, and trends are analyzed according to the band width
- The middle band is generally similar to the 20-day baseline; the area above the middle band is judged to be a zone of buying strength and the area below a zone of selling strength
2. How to use
- If the band width has been moving steadily and then widens as the upper line moves up and the lower line moves down, it is judged to be the point at which prices will change
- If, after the band width widens, both the upper and lower lines head upward, it is judged an uptrend; otherwise, a downtrend
- If the price breaks above the upper line, a strong trend is judged to have formed, and when it subsequently moves away from the upper line it is judged a selling point
- If the price breaks below the lower line, a strong downtrend is judged to have formed, and when it subsequently moves away from the lower line it is judged a buying point
- It is appropriate for short-term traders to judge based on daily candles, and for medium- to long-term investors to judge based on weekly and monthly candles

MACD indicator
1. Basic structure
- Consists of two lines: the MACD line (12-day exponential moving average ~ 26-day exponential moving average) and the signal line (9-day exponential moving average)
- The horizontal center line of the MACD indicator is set to a value of 0, and this is used as the reference for judging the strength of the stock price
2. How to use
- When the MACD line breaks above the signal line, it is called a golden cross; this is seen as an uptrend and judged a buying point
- When the MACD line breaks below the signal line, it is called a dead cross; this is seen as a downtrend and judged a selling point
- When the MACD line breaks above the center point 0, the price is judged to be strong, and this is judged a buying point
- When the MACD line breaks below the center point 0, the price is judged to be weak, and this is judged a selling point
- It is appropriate for short-term traders to judge based on daily candles, and for medium- to long-term investors to judge based on weekly and monthly candles

The charts provided by securities firms and virtual currency exchanges have many other auxiliary indicators besides these. However, charts should only ever be used as reference indicators.
The right investment attitude is to set your own investment principles and use charts as a tool to keep them.
Because charts are data that show the past, not data that show the future.