Since the MACD histogram is a derivative of price and not a price itself, this approach mixes the signals used to enter and exit a trade, which is incongruent with the strategy. I said you always say that, if we trade the longer timeframe, we can spend just 30 minutes at day checking the charts and taking the position, and then came back the next day. After reading this tutorial, you will be able to:
HI Chris… can I know what the lowest volume amount in real account? In demo account however, they support 0. I feel the articles in LuckScout. I am into stock trading. I see that the articles about candlestick signals, bollinger bands and MACD are primarily written for markets.
I believe these articles hold good for stock markets as well and I wanted to confirm with you the same. Say for example, this article Slower settings of MACD indicator , does it works good for stock market as well.
I am not experienced in market and I wanted to confirm with you. Candlesticks, bollinger bands and MACD is all about numbers ultimately depends on open, close, high and low prices. Hence, I believe it has to work for stock markets as well.
The strategies we follow here can be applied to any markets, including stock market. Specially the candlesticks patterns is a great tool for stock trading. Slow MACD can be applied to stock market too. Just add it to the stocks you trade and check the back data. In the text you refer to using settings of 24,52,9 but all the chart examples seem to use 24,52, I presume the chart settings are the ones to use, is this correct? I beg to differ Chris, on my platform Tradestation it makes a huge difference to the outline of the histogram.
How can I send you a screenshot comparing the 2 settings? On MT4 the last number is related to a simple moving average that we usually make it invisible because we only want to see the histogram on the chart. My candlesticks look exactly the same as yours. To try to illustrate what I am talking about, I have attached 2 screenshots. The second screenshot shows at the top my chart from the 1st image, and then below it the same chart but with the addition of the usual MACD with both lines and the histogram.
The histogram is of course completely different to the first image. All I am trying to do is establish exactly what is is you are using as what you say in your text and what is shown in your charts are not the same thing.
Wait for the divergence, wait for the histogram to lose momentum on the timeframe that created the divergence and enter. All profitable as far as I can see. What do you mean when you say the slower MACD filters out the noise? What is the noise? Also, what do you mean when you say it makes the MACD slower?
MACD default settings is 12, 26, 9. Slow MACD is 24, 52, A moving average which is set to one, shows any up and down. But a moving average that is set to 10, takes the average of 10 movements. When ten movements become one, it means the noise is eliminated. Thanks Chris for the article.
Should one always move SL to breakeven when the price is moving toward the target in every trade as a matter of principle? I would really appreciate your response.
It is one of the ways that helps you to lower the risk. Hi Chris, you always say we should move the stop loss to breakeven when the chart is moving toward our target, but since we look the charts just 30 minutes at day, how can we always be in front of the screen, at the right time to move the stop loss? That is not the only thing I always say. In addition to that, I always say that you have to trade the daily, weekly and monthly time frames and forget about the shorter time frames, not to have to sit at the computer all day and night.
Have you ever seen anywhere on this site that I recommend the traders to trade 30min chart? I said you always say that, if we trade the longer timeframe, we can spend just 30 minutes at day checking the charts and taking the position, and then came back the next day.
Or do you move the stop loss the next day, when you check the charts, without being worried to loss your profit? Yes, you can move the stop loss next time you check the market, which is usually the next day after the daily candlestick close.
Daily, weekly and monthly time frame are long enough to give you the chance to move the stop loss before it becomes too late. You always give me the right answer. Can I move the stop loss to breakeven when my target has reached the same size as my initial stop loss? You can, but I think that is too early. We can go short when MACD bars are descending. When we should not go short when MACD bars are ascending and a sell signal forms by candlesticks.
Thanks Chris for always simplifying things. You give us novice traders hope and courage to strive for the best. Your articles will make our dream of becoming a professional trader come true. I would have guessed that this was actually a valid strong signal: But you dismissed it. Was it because the bull candle was not long enough? OMG you are turning me into an awesome trader…. I payed to join a trading group on facebook but it was well worth it cause someone posted an LuckScout article and I came and got hooked on the site and found the best trading system in my opinion that is very easy for me to understand.
Cannot thank you enough! Sir, will you please let me know the perfect timeframe for intra day trading. And can I also use this stretagy on any currency pairs? I had a basic knowledge when i started my trading carrier. Now i am trading with my demo account. According to your practical strategy i think trading is much more interesting and important.
I followed many sites and red many articles to improve my knowledge, Accidentally i found this site and i think i got in to the right track! Hope to get success with patience. Candles are my favorite. Try never to miss your great articles. Thank you Chris for sharing your knowledge without greed! The chart below will illustrate further: This strategy can be utilized on any timeframe longer than the hourly chart. Both indicators are built and traded from the same time frame, so no additional work outside of adding the indicators is required of the trader.
In this strategy, the trader wants to first grade for ranging market conditions, and this can be done with the ADX indicator. This is the filter for the strategy. If ADX is greater than 30 - then traders do not look to trade this range-based strategy as prevailing trends may be too strong for cogent entries. Stops and Limits with Limits being set at 2 times the stop amount. Stops and Limits can be obtained by using the 4 hour Average True Range amount. While being one of the most difficult market conditions to trade since it is nearly impossible to predict when a reversal of price may actually take place , trading Reversals is also one of the most attractive to retail traders.
With one look at the SSI, and noticing the penchant that many retail traders have for attempting to call tops or bottoms helps illustrate this. Reversals can bring big moves to the trader. They can also bring big losses. Which is precisely why it is so important to use strict risk management when trading in these conditions; and traders should be ready to cut their losses quickly the reversal proves unlikely.
The picture below will illustrate a classic case of Bullish Divergence. Any time frame chart with MACD applied default inputs of 12,26, and 9. Stop should be set to the low of the move with Bullish Divergence or the high of the move with Bearish Divergence. When a new trend occurs, the fast line will react first and eventually cross the slower line. From the chart above, you can see that the fast line crossed under the slow line and correctly identified a new downtrend.
Notice that when the lines crossed, the histogram temporarily disappears. As the downtrend begins and the fast line diverges away from the slow line, the histogram gets bigger, which is good indication of a strong trend.
This suggested that the brief downtrend would eventually reverse. There is one drawback to MACD. Naturally, moving averages tend to lag behind price.