Forex trading strategy #22 (Best of MACD Entries)

I tried using this strategy on my trades for all crosses and at different times. Sometimes the SMA signals would be a sell and then the curencies travel at the opposite direction. Is there a specific time frame and/or additional indicators that we must follow? I did everything displayed here at out of 30 trades, only 8 are successful.

Hi,
Here is two lines MACD to use with MT4: MACD_2_Colour_HISTOGRAM.mq4

Check out MACD settings, if need change to standard 12, 26, 9.

Regarding strategy rules, they suggest that to Sell, MACD lines have to cross above zero when the market is bullish, opposite for Buy; however nothing is said about MACD lines crossing the histogram bars.

Best regards,
Edward

Hi all!
First of all i wanna thank you for your great site.
I trade with MT4 and it does not have two lines in MACD and has just one.I noticed that in H4 timeframe if the Market is bearish as said above, trade sell when MACD is over bought and the line crosses the histogram above the zero line and vis versa for buy.
Correct me if i am wrong.
Thanks

Hi -ml-,

SMA is smoohter, while EMA is faster to respond to changes.
Depending on a task, I use either SMA or EMA. Most of the time I end up using SMA.

Regards,
Edward

hello edward.. just wondering, y r u using sma instead of ema ? .. it seems the ema's r more responsive compared to the sma's.. any particular reasons ? thanks -ml-

I'd use Parabolic SAR indicator OR previous swing high/low for stops, whichever is less distant.

Regards,
Edward

What Stop Loss should we use?

I found this strategy have a similar parameter & Indicators with Boris & Kathy "MACD Combo Strategy" from his & her ebook : "High Probability Trading Setup For Currencies Market" BUT the different is Boris & Kathy only use in 60 Minutes & Daily TimeFrames, & this strategy in smaller Timeframe.

Regards;

Manus168

your system without any filter is bad, i have test it

New Flashing Chart Analysis: http://www.bondfx.biz/MarketAnalysis.htm

Yes, opposite applies for Buy entry,
exactly as you said, just add the word "BOTH":

"BOTH MACD lines cross BELOW zero level And
BOTH MACD lines are BELOW the MACD histogram."

This approach misses on some trades, but with it it filters a lots of bad trades.
You can't catch each and every winning trade, some of them you'll miss, but the point is, you'll be kept safe away from many losing trades.

Regards,
Edward

Hi Edward,
In relation to your last post, so opposite applies for buy?

MACD lines cross BELOW zero level And
MACD lines are BELOW the MACD histogram?

*When you say above the histogram, it means BOTH lines appear higher/lower than the bar on the histogram?
*I notice that this rule misses out on many trends that occur when, for example the green SMA is above the red SMA but the MACD signal line is above the other MACD line.

MACD is overbought and you have a valid Sell signal when both statements are true:
- MACD lines cross above zero level.
- both MACD lines are above the MCAD histogram.

Regards,
Edward

Hi,
Can you be more specific with what you mean when you say:
MACD is over bought and crossed

Im not quite familiar with this signal.

Thanks!

Well said Edward,

While I appreciate the User's concerns, I believe James has done a wonderful job by posting just another great, simple and easy to use Trading Strategy here. I understand it takes a lot of courage and basically you need to have that open-minded approach where you dont mind sharing your strategies with others in an attmept to not only help others but also to get a feedback so that the strategy can be improved in future.

I've all the appreciation for James, Edward and everyone who has shared even a single line here, well done mate and Good Luck with your Signal's business ...

Cheers,