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Complex trading system #11 (Trading MACD consolidation)

Current Forex strategy was submitted by Egudu - our valued contributor.

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I am egudu, and here's another strategy.

It's trading the MACD consolidation.
Time frame: 1hr
currency: any
indicator: MACD(12,26,9)

MACD consolidation

Entry: place a buy stop and a sell stop 5pips during the MACD consolidation with a stop loss of 10pips from entry and a profit target of 30-50pips.

Please note that, the MACD must be very close, in fact it should almost become a straight line only then should you enter the positions. l hope to give a picture shot of it soon, but u can check the chart of GBP on the 7th, 10th, 14th of Dec 2007 on the hourly chart.



Egudu, thank you once again, and we hope to hear from our users about their tests and trading performance with this strategy.

Edward Revy
http://forex-strategies-revealed.com/

Hallo Edward'
Could You pleasce describe me how to set up two lines on MACD on MT4 cos I ve got on myne only one ?
very good job with the website!!!
Thanks a lot
Darius
Sorry for my english I am not a native speaker

Hi Darius,

Here you may upload a custom MT4 indicator:
Good_Macd.zip

Regards,
Edward

Hallo Edward,
Thank You very much for your help,
I,ve found all indicators.
I'll sent you my result about (simple trading strategy#11, #16)
Regards
Darius

hi, i am new in forex i read this simple strategy but did not understand the sentence 'place a buy stop and a sell stop 5pips during the MACD consolidation'? please can u describe it deeply.i am a newbai here so if i asked a baby question than i apologise it.
thanx, jatin

Hi Jatin,

If you look at MACD on the screen shot above, you'll be able to identify blue histogram of MACD. This histogram oscillates around MACD 0 level, expanding and compressing as price action unfolds.

MACD consolidation is observed when MACD histogram bars become really short and compress tightly around MACD 0 level. At those moments the price on the charts will have a very narrow trading range. Traders' task is to identify that trading range and mark its high and low boundaries (either visually or by drawing trend lines) and then place pending trading orders (Buy stop and Sell stop) 5 pips away on each side of the trading range.

Buy stop is a pending order placed above current price and will be executed only if price reaches the value set in the order.

Sell stop is also a pending order placed below current price and will be executed only if price drops to the value indicated in the order.

Should you have any further questions, you are very welcome to ask.

Regards,
Edward

I have to understand: this is an OCO placed in the consolidation phase ? Or if there is no possibility for OCO traders must manuel itselfs delete the order not going into the direction made at first ?

Yes, these are OCO orders.

When the MACD consolidates, should we be concerned about high/low volume as well?

John