Do you trade macd? Here is a better way-study first-test-then apply

#1
Hi friends

Trading MACD is not as simple as it looks.
The point is
Trade price-trend dont trade the indicator signal by itself.
filter the indicator signal with price action(trend) then trade



here you can get some simple hints to improve your macd based trading.

Know how to profitably use MACD, the Moving Average Convergence Divergence indicator like God.
Trade it without fear.
For the first time, we are revealing to traders the basic powerful market principle that one must follow when trading MACD.


http://www.youtube.com/watch?v=9SQ4HxyVoHE

macd is moving average convergence divergence.
ema12 and ema26-their coming together or going away is covergence and divergence.

macd generally to be used on weekly chart-as per the video presenter.


hint1
on the macd chart you see ema26 as zero line and DIFFERENCE OF (ema12 & ema26) as macd as line going above and below it.

if macd is moving up and away from zeroline and if it returns to zeroline,if ema26 is steady or moving up during this time,then return of macd to zeroline doesnt result is drop in price.

If macd is going down and true value(price) of instrument is also going down,then crossing up of macd above zeroline doesnt result in rise of price-it simply continues down movement. So in a downtrend of price,dont try to buy on macd crossing above zero line.


Hint
see chart attached
situation: price is steady-and not going down-(see two lines marked on chart)
when macd cross signal line upside,buy then.
Ask two questions
1 what is price doing? is it steady? is it moving down(use trendline)-going up(use trendline to assess)
In the example,price is steady-flat in the two lines marked aBOVE AND BELOW PRICE
2.WHAT IS MACD & SIGNAL DOING? cross up? cross down?
IS MACD-SIGNAL BOTH ABOVE ZEROLINE OR BELOW ZERO LINE?
A)If real value -real price is not falling , B)a cross of macd above signal is time to buy-WHEN MACD,SIGNAL ARE ABOVE ZEROLINE





 
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