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how to use macd

  • #1
  • First Post: Feb 11, 2008 11:07pm Feb 11, 2008 11:07pm
i really confuse to use macd. how to use it? please give me suggestion
  • #2
  • Feb 14, 2008 11:30am Feb 14, 2008 11:30am
Just visit this intresting link about MACD with detail...

Inserted Video
  • #3
  • Feb 14, 2008 4:00pm Feb 14, 2008 4:00pm
If you want a good piece of advice. Don't use indicators.
Seems crazy but you'll understand after about 1 year of trading.
  • #4
  • Feb 14, 2008 5:07pm Feb 14, 2008 5:07pm
Do trend lines and fibs count as indicators? They do indicate things...
  • #5
  • Feb 15, 2008 4:58am Feb 15, 2008 4:58am
No they don't indicate anything so they are ok to use. They are just levles.
An Indicator has to indicate bullish/bearish momentum or something else and for that the indicator takes past date and calculates a value.
Everything that takes Candle Open Close Prices etc. will not work.
  • #6
  • Feb 15, 2008 5:07am Feb 15, 2008 5:07am
but im sure after 2-3 years trading he'll be back to use indicator, with different perspective usually.

Quoting Linus78
If you want a good piece of advice. Don't use indicators.
Seems crazy but you'll understand after about 1 year of trading.
  • #7
  • Feb 15, 2008 5:12am Feb 15, 2008 5:12am
Give me one good reason why one should use indicators.
  • #8
  • Feb 15, 2008 6:01am Feb 15, 2008 6:01am
They indicate something....but that's not the problem right? the problem is "Not in the same way of reading". Many pro's still using the MA's..but what make it different is ..they know to exploit the utility of that indicator.If just cross..up,cross again down..it wont work.Anyho, im using indies now.They are cute.-- but also im using PA--this is the master, oh yes..with a money management too--this is the queen--, in a healthy mental--KING.just my 2 cents

Quoting Linus78
Give me one good reason why one should use indicators.
  • #9
  • Feb 15, 2008 6:25am Feb 15, 2008 6:25am
They indicate nothing. You'll see it only after the fact.
Why? Because they use PAST Data. It's a simple as that.
You can use MAs as dynamic support but that's all.
  • #10
  • Feb 15, 2008 7:40am Feb 15, 2008 7:40am
I don't think this has anything to do with the original question. Indicators are not infallible, however I use them and have been profitable for the last 3 years or more. I also read price action. I also trade based on longer term fundamentals. However there is a place for indicators, especially on the larger time frames. Berating a new trader for wanting information on a basic indicator isn't helpful and only makes you look pompous. When someone asks a basic question, don't give them your one sided opinion.



I would ask the original poster to check out: http://www.babypips.com/school/

Specifically lesson 6. However if you don't have a basic understanding of MACD, I would imagine the other lessons could be of value to you as well.
The basis of a democratic state is liberty. ~ Aristotle
  • #11
  • Edited 9:33am Feb 15, 2008 7:56am | Edited 9:33am
Quoting Linus78
Give me one good reason why one should use indicators.
Im a day trader ... Im using 30- Minutes chart for my all trade's ... My target profit per trade is +30 Pips per trade in which im 100% confidence and sure and +10 Pips per trade in which i have little doubt. My SL is -40 Pips in all JPY'S related pair's and -30 Pips in other's.. I believe by gaining something is batter than losing much...
Yes you are right that Trendlines', Fib's , S/R , Etc , Etc Is a true style of trading and im also trading through that method from more than 5-Year's of my experience but i can not neglect the importance of indicator's... Im also using some commen indicator's with my technical style of trading.... Coz they help me alot & save me from hitting my SL ... You know how...???
Than see the screenshot carefully.Coz if i remain's in this trade targeting +30 Pips then My SL of -30 Pips was 100% Sure to Hit... That's why i just target +10 Pips in this trade and that was my winning one... Although this pair move's down to +18 Pips but coz of SSTO in oversold region it retrace's back immediately for -49 Pips ... And Hit my SL(If i remain's inthis trade) ... coz of SSTO in oversold region I just target for +10 Pips . You'll find more detail in screenshot also...
Attached Image (click to enlarge)
Click to Enlarge Name: Example.JPG Size: 167 KB
  • #12
  • Feb 15, 2008 8:21am Feb 15, 2008 8:21am
Bcos this guy just doing badly even with indies, thats y he say indies = useless. U ever seen a fool cut himself by knife then keep telling ppl "Knife is useless shxt.." just my 2 cents as well
  • #13
  • Feb 15, 2008 12:37pm Feb 15, 2008 12:37pm
I already said it in some other post somewhere here: no indicators will help you if you don't know the basis. Period. And the basis are these three things: what a trend is and how it works, what a ranging market is and how it works, and where you have your support/resistance. These things are universal. They work in all markets where there is enough demand and supply. Knowing these, and more over, knowing how to apply these, will make you profitable.

Now, I would say (and this is just my humbe opinion) that trendlines, fibs, and so on, are also indicators, they are also based on historical data. You draw your trend line based on the lower/higher lows/highs, which happened in the PAST. But they are forecasting indicators. Things like MACD, Stochs, CCI and so on, are lagging indicators, but they are not useless. THey also are based on historical data, and as long as you know how each of them works, combined with the basis (TL's, candlesticks, fibs, etc), you can catch quite good momentums and run into profit sooner rather than waiting in negative for hours and sometimes days.

Start with the basis, only then you'll understand whether things like MACD suit your strategy or not.
Trax Tibidax Tibidox...
  • #14
  • Feb 15, 2008 1:36pm Feb 15, 2008 1:36pm
Quoting blackhand
Bcos this guy just doing badly even with indies, thats y he say indies = useless. U ever seen a fool cut himself by knife then keep telling ppl "Knife is useless shxt.." just my 2 cents as well
Haha funny you're saying this about me .
Nice try. ^^ *whipes away tears of laughter*

I got to a point of wealth where you'll never be in your wildest dreams. Want to compare Money Peni$'s? Bring it on. ^^
  • #15
  • Feb 15, 2008 3:28pm Feb 15, 2008 3:28pm
Quoting Linus78
Haha funny you're saying this about me .
Nice try. ^^ *whipes away tears of laughter*

I got to a point of wealth where you'll never be in your wildest dreams. Want to compare Money Peni$'s? Bring it on. ^^
Maturity...
The basis of a democratic state is liberty. ~ Aristotle
  • #16
  • Feb 15, 2008 5:29pm Feb 15, 2008 5:29pm
No need to act mature to be successful . ^^
  • #17
  • Feb 15, 2008 5:45pm Feb 15, 2008 5:45pm
Quoting Vensik
Maturity...
Just a bit.
  • #18
  • Edited 1:12am Feb 16, 2008 12:45am | Edited 1:12am
Quoting Linus78
......I got to a point of wealth where you'll never be in your wildest dreams.......
Linus, I’m apparently nowhere near as successful as you are, but I’ll offer my opinion anyway.

Both newcomers and mechanical traders tend to prefer indicators because they give unambiguous signals, making disciplined entries easier. Being easy to code programatically, they are also an essential component of most EAs. However, indicator-based EAs are susceptible to excessive optimization, or "curve-fitting".

I agree that all indicators are derived from past data and are therefore lagging. Being calculated directly from OHLC(V), they don’t really offer an independent confirmation of price action. However, they may be useful if they highlight phenomena that isn’t immediately obvious from price, although this depends on how experienced one is at reading charts. Take divergence as an example. Many traders (even experienced ones) use MACD or RSI to locate divergences. But divergence is really nothing more than a slowing in momentum: if we draw imaginary lines between successive price peaks (or troughs), a change in the slope will generally highlight any deceleration just as effectively.

Line studies (trendlines, Fibos, S/R, floor trader pivots, ....) purport to be leading indicators, but they too are projected from past data (in reality, all TA uses past data to make predictive assumptions). However, IMHO line studies are more likely to capture any "self-fulfilling prophecy" effect better than indicators. The reason being that line studies remain consistent across time frames, time zones, and parameters, and are therefore likely to be conspicuous to, and therefore acted upon by, a greater number of traders. Whereas candle patterns can vary with time-zone; and indicators are both time-frame and parameter dependent, reducing their potential universality of use.

Indicators were originally designed for use with stocks, and I find it curious that no adjustment has been made to the factory defaults (e.g. 12,26,9 for MACD) to accommodate forex. As an example, (from what I have seen) forex generally tends to revert to a mean more frequently. [Three possible reasons: (1) much of the liquidity is provided by non-speculators (greater diversity of participants = greater randomness); (2) a currency pair is the measurement of two countries' economies relative to each other (greater opportunity for complex opposing forces to pull each way); (3) economies will always run in boom-bust cycles because when economic indicators approach extremes, governments intervene, i.e. forex is artificially regulated.]

Perhaps this is because TA is essentially about determining trend, momentum and/or points of probable reversal. The bottom line is that it doesn’t matter which indicators we use. Ultimately, we must enter on a price bar, and any indicator can be optimized to allow an emerging move to be entered "n" bars earlier, or later.

There are professional traders that prefer to trade naked, and professional traders that use indicators. Hence both approaches can be made to work profitably.

____________________________________

Quoting masterpiecefx
I already said it in some other post somewhere here: no indicators will help you if you don't know the basis. Period. And the basis are these three things: what a trend is and how it works, what a ranging market is and how it works, and where you have your support/resistance. These things are universal. They work in all markets where there is enough demand and supply. Knowing these, and more over, knowing how to apply these, will make you profitable.

Now, I would say (and this is just my humbe opinion) that trendlines, fibs, and so on, are also indicators, they are also based on historical data. You draw your trend line based on the lower/higher lows/highs, which happened in the PAST. But they are forecasting indicators. Things like MACD, Stochs, CCI and so on, are lagging indicators, but they are not useless. THey also are based on historical data, and as long as you know how each of them works, combined with the basis (TL's, candlesticks, fibs, etc), you can catch quite good momentums and run into profit sooner rather than waiting in negative for hours and sometimes days.

Start with the basis, only then you'll understand whether things like MACD suit your strategy or not.
Masterpiece, excellent post, IMHO.

David
  • #19
  • Feb 16, 2008 3:42am Feb 16, 2008 3:42am
Very well put hanover. I totaly agree.
It's just a personal preference.
From my experience I can say that not using indicators has made
trading even easier! They distracted me from the price all the
time which got me in bad trades. I've also tested a strategy
where I usually have 2 indicators for confirmation. Without them
my results where even better.
  • #20
  • Feb 16, 2008 4:02am Feb 16, 2008 4:02am
Quoting Linus78
Very well put hanover. I totaly agree.
It's just a personal preference.
From my experience I can say that not using indicators has made
trading even easier! They distracted me from the price all the
time which got me in bad trades. I've also tested a strategy
where I usually have 2 indicators for confirmation. Without them
my results where even better.
Linus!!!
It's not the matter of using indicator's or not... All i wana say if you are doing well with out using indicator's than nothing is batter than that for you my friend in this risky business... Keep up your good work...GoodLuck
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