FREE FOREX STRATEGIES

Forex trading strategy #7 (Simple MACD crossover)


Trading with MACD indicator is widely used by Forex traders.
Let's take a glance at the very basis of currencies trading with MACD indicator.

We will need only MACD indicator with standard settings: 12, 26, 9.
Any time frame as well as any currency pair can be used.


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Hi Guys, I have been trading MACD crossovers for more than a year now and it is absolutely key to have strict take profit and stoploss controls in place. Generally I use twice the Average True Range (ATR) of the last 14 bars as a take profit and move the stop to breakeven when into profit by one ATR. My stoploss is set a few pips below/above the last swing low/high. I find that MACD crossovers on their own are not a strong enough signal to enter into a trade and I agree with a lot of comments on this thread that other indicators are benificial to the strategy. I use a combination of SMA, Parabolic SAR and ADX to confirm the signal. This combination gives around a 70% success rate accross several currency pairs and even commodities.

I like this trading method so much that I have had an EA built to automate this strategy. This has the benefit of not having to be sat in front of the computer constantly switching between charts. This also allows me to catch the trades that trigger overnight whilst I am asleep, there is nothing like coming down in the morning to see your account having grown overnight. However, you do not need an EA to trade this method, you can still get significant returns manually trading.

All the best
Simon

Download the 2 line MACD: Good_Macd.mq4

then check out the installation steps: http://forex-strategies-revealed.com/mt4/how-to-add-and-use-mt4-custom-i...

Alex

Hi everyone. pls could any one show me how to insert MACD indicator in live chart(ALPARI META4) to have 2 lines(i.e. the signal line & the other one) along the histogram. My own experience has always been one line along the histogram, illustrations in books, manuals always show 2 lines instead.

Many thanks in advance.

Nse.

Thank you,

MACD is already based on Moving averages, namely 12 EMA and 26 EMA.
So, it depends what MACD signals you're going to use.

E.g. when MACD histogram crosses Zero, it indicates that 12 EMA has crossed 26 EMA,
which would be identical to regular 10 & 25 Moving averages crossover - it would be a repetition of the same signal.

Hope this helps.
I'd suggest reviewing the topic about MACD indicator, because when you know the tool well, you can use it to the greatest advantage.

Best regards,
Edward

hi,i have been following your thread for a while,its the most informative i have seen,thanks for the good work. Do you think using EMA10,25.50 alongside MACD is a strong enough system to make profits ?thanks,i would really appreciate your comment.

When the stop loss for a strategy is not given, then we should use the most recent swing high/low to place a stop behind it.
Another method would be to place a stop with Parabolic SAS indicator, or with Heiken-ashi indicator, which you can read about here: Heiken-ashi indicator

Happy trading!
Edward

very simple to use. how would I set stops loss with this strategy?

thnaks for your help

Hi,

I can't find the document. Please try uploading again.
Thank you.

Regards,
Edward

HI EDWARD,

THANKS FOR ALL THE WONDERFUL STUFFS POSTED HERE.. GREAT STUFF REALLY!! I JUST NEED A DETAILED EXPLANATION ON THE Good_Macd.zip YOU POSTED HERE. I WAS ABLE TO LOAD TO MY CUSTOM INDICATOR LIST AND I HAVE ATTACHED A DOCUMENT SO THAT YOU CAN UNDERSTAND WHAT I NEED YOU TO EXPLAIN TO ME PLEASE.
PLS SEND A COPY OF YOUR REPLY TO babatunde_od(at)yahoo.co.uk PLS.

MANY THANX

BABATUNDE_OD

As practice shows, default settings (12, 26, 9) work the best.

Regards,
Edward

what settings would you recommend for eur/jpy 1 hour timeframe?

Thanks for your help

Hi Oluyomi,

I'm an individual trader.

A $2000 investment can produce anywhere from $200 to $1000/month roughly, could be much more, but could also be less, all depends on your trading approach.

Best regards,
Edward

Mr Edward,

With your experience in forex trading, what is the average one can make in a month by investing $2000 using your trading system? Do you trade forex as an individual or a group?

Best regards
Oluyomi

Hi Manus168,

Regarding MACDs, both paint the same picture.
2 MACDs Forex

Regarding settings, could be tested, but results probably will be very close to the standard 12, 26, 9 MACD.

Regards,
Edward

This is for Barry.. I use Sharp world clock.. You can have as many timezones as you like and customize it to your liking.
Hope this helps
Lou


 

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