DislikedOK. This is a great trending system that is very simple.
1. Create a one hour chart and any pair but the more volatile pairs are more profitable.
2. Add the MACD indicator using the 12, 100, 9 parameters.
3. Buy when the fast average passes over the slow average.
4. Sell when the fast average passes under the slow average.
5. Use 50 PIP stops.
That is the entire system. 100% mechanical. Simple but very effective...
Happy Trading,
TyroneIgnored
Thanks for volunteering your system.
Just for correctness, you talk about the "fast average" and the "slow average". If you're using the default MACD on MT4 (don't know if you are or not), when the fast MA (12) and the slow MA (100) cross then the histogram changes from positive to negative. I believe your signal is when the histogram passes above or below the *signal line* -- which is simply a MA (9) of the histogram values. Correct me if I'm wrong (in which case your signal is for a zero-line MACD cross). If I'm right (and it is indeed the histogram/signal cross which is your trigger), I would question how much you know about how MACD works, or perhaps you just got your terminology confused...?
- Could you explain how this system will perform any differently than any other MACD-based system?
- Why is the "100" EMA value different and why does it perform better than the default "26" EMA?
- How will this perform in a sideways market? (see picture)
- Do you have any performance data for this system?
I ask these questions for two purposes:
1) Because I'd like to know how well this system will perform, and you should be the best authority on it!
2) Because people here tend to blindly accept systems without having an understanding of how they work (I'd wager a bet that the majority of people reading this thread right now have little understanding of how something as popular and ubiquitous as MACD even works, despite its relative simplicity), and I'd like for those who might fall into this category to think a little bit about why something may or may not work, before spending valuable time chasing a "holy grail".
I'm not hijacking, or trying to put down your system--just trying to get answers and to get people to think. Thanks for posting your method!
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