Macd

Trading eh? I fooking hate it...this morning I do anyhow, lost close on 3% of one account..that's me out for the day...that hasn't happened for a long long time...:eek:
Well BS, I don't know what it is that you've got but, if it's any consolation, I appear to have caught the same 'bug'. I'm down 1.75% today (and knocking it on the head) which is the biggest hit I've taken in one day, the biggest this year and, in fact, the biggest since I started trading the YM. I should have listened to my late mother more, as she was always telling me that I spent too much time fraternizing with the wrong crowd. I never realised she meant Forex traders!
;)
Tim.
 
Hi bulkbiz,

I did not test my method on the forex market as the focus of my paper is the equity market. However, whatever analysis I have done thus far can be done by any numerically literate person. Just get the data in whichever time frame, generate the moving averages in Excel, and do some number crunching. You never know what sort of insight it may provide. I am also finding that using longer-term moving averages gives greater returns. But the drawback is, of course, the long-term moving averages generate less trading signals!

I am not sure what other advice to give you, besides what I already have said. I do not trade these systems as I am a day trader at heart. However, if you are finding that your friends, who utilize the same method as you, are making more pips, then maybe that is their trading system. What I mean by this is there could be a possibility that in their historical analysis, your friends have identified that after having a 700 - 800 pip open profit a trade, the market is likely to reverse, even if the MACD does not convey a signal for exit.

Maybe you could do a similar analysis and determine at what open profit in pips the market is likely to reverse could signal an exit. This could, effectively, be part of your trading methodology. You don't necessarily need another indicator to confirm an exit. At the end of the day, the objective is to generate a methodology that has the highest probability of success and generates the highest profit.

Remember, for every indicator that tells you to stay in the market, there is an indicator that tells you to get out. If you find that, on average, closing a position after having an open profit of 700 - 800 pips works better than whatever exit signal you are using right now, then I suggest incorporating that into your exit signal. You'd make more money!

Amit

Hi Amit,

Thank you very much for the advice and your analysis. Actually my entry signal is based on renko chart. But in order to maximize the profit and minimize the losses, I need some indicator to help. So far for non volatile pairs, my method is good. But Amit, did you test in forex market?

A lot of people misunderstood and get the word "trend trading" wrongly. Trend trading has no specific take profit level. When I shared with my friends about my trading strategy, they earn more than me, reason is because when the pips reaching 700-800pips, regardless of the trend is still moving on their favor, they will take profit. But in fact that is not consider as trend trading already, they violate the rules.

MACD is the only indicator for me to identify the trend changes currently, any other value advice for me? Remember my rule is cut losses when the market is ranging and let the profit run when market is trending, I don't want any trailing stop, fibo level, round number, psychological number and so on. I just need some indicator/method to detect earlier trend changes.
 
Thank you trendie!

You are right in that fall faster than they rise. Studies have confirmed that volatility is a lot higher in falling markets than they are in rising markets. For this, they have structural change studies and utilize different probability distributions over different segments of the market.

I haven't yet worked on the things you mentioned. One thing I would definitely like to investigate is how long is the optimal time to hold a long position after an entry signal. I think this would be interesting. A study I working closely with suggests 10 days, but I am not convinced of this. Once again, if you keep a record of all your trades, this can be analyzed easily.

I will keep in touch if I come up with anything useful further.

Amit




very illuminating post, amit1986, regarding that only long positions were profitable, and usefully so.

I have heard somewhere or other that markets fall 3 times faster than they rise, so perhaps a falling market has a different characteristic than a rising one.

Did you do any work on the number of days a market rose, and the amount it rose in those days?
And, see how many the days the market fell, and by how much per day?
And thus, deduce anything useful?

That kind of insight could help to quantify an optimal setting for short-only triggers on the MACD?
 
Well BS, I don't know what it is that you've got but, if it's any consolation, I appear to have caught the same 'bug'. I'm down 1.75% today (and knocking it on the head) which is the biggest hit I've taken in one day, the biggest this year and, in fact, the biggest since I started trading the YM. I should have listened to my late mother more, as she was always telling me that I spent too much time fraternizing with the wrong crowd. I never realised she meant Forex traders!
;)
Tim.

I logged on to get to work on my equity curve a bit later than normal, my rules are generally If I've missed my entry, even by a candle or two in an obvious trend, I wait until the next mini swing...I got caned due to a mixture of arrogance and complacency. Good thing I closed the trades down early otherwise the loss would have been 8%, 2 grand :eek: (risk of 2% per trade) had I reversed/got back on track according to my edge/rules I'd have easily recovered losses and some, but it's deffo made me think again re. overall exposure at any given time...irrespective of the trades signalling perhaps I should limit risk to no more than 4% at any given time...I've got away with it for so long now perhaps this was a smackdown well overdue...;)
 
hye, i use macd too , but what i look for is "no crossover" .

for exemple not yet crossover on 4 h chart and divergence MACD or histo on the 1 hour or 30 min. chart.

for a buy setup, buy the nearest support or the divergence, or the fibo or the trendline blablabla...

have a nice day.
 
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