Macd

Discussion in 'Technical Analysis' started by Masterchief, May 16, 2005.

  1. Masterchief

    Masterchief New Member

    Joined:
    May 14, 2005
    Messages:
    21
    Likes Received:
    2
    Trophy Points:
    3
    MACD

    I'm attaching a chart of IBM Stock as an example of entering Long and Short positions whenever MACD thick black line crossed above 0% or subsequently crossed below 0%.

    the chart is a little over a year, but because this is the only sample data being presented, it may not be a valid correlation. Play around with it and determine if this is something you'd like to employ from time to time as an added signal.

    I'd like to hear if anyone has had much success using this technique singularly or in association with other signals. I regularly use Moving Averages exclusively, but may use MACD in addition to.

    MasterChief
     

    Attached Files:

    Last edited: May 16, 2005
  2. sh50

    sh50 Active Member

    Joined:
    Mar 15, 2004
    Messages:
    690
    Likes Received:
    33
    Trophy Points:
    28
    My experience has been that if you set RSI limits to 60/40 and then use it, it quite synchronises with the MACD though not exactly. In the graph you have given, you have taken only centralline crossovers as buy and sell signals but conventionaly the macd crossover can also be a buy signal though not as reliable as the central line crossover. These two also coincide with Martin pring's long term momentum indicator in Metastock.

    It goes without saying that MACD is deemed more effective on weekly graphs for long term trends.
     
  3. Masterchief

    Masterchief New Member

    Joined:
    May 14, 2005
    Messages:
    21
    Likes Received:
    2
    Trophy Points:
    3
    sh50, Thanks for the insight. I don't traditionally use RSI, but I will evaluate.
     
  4. mtayal

    mtayal New Member

    Joined:
    May 13, 2005
    Messages:
    4
    Likes Received:
    0
    Trophy Points:
    1
    Masterchief:

    I have found MACD to work wonderfully in trending markets but fail miserably in sideways market. Technique, I am working on is to first determine if the market is trending using Klinger OSc or Linear Regression Slope or VHF. If Market is trending use MACD else use Stochastic Osc. I use Metastock and I have seen in system test that MACD and Mov Avg average cross over fail in trending market. Have you worked with Guppy's MMA? I have jsut started exploring it. Results are impressive.
     
  5. snowy

    snowy Member

    Joined:
    Sep 2, 2004
    Messages:
    55
    Likes Received:
    1
    Trophy Points:
    8
    Location:
    Chennai
    In his book on trading which has been discussed elsewhere in this forum Mr. Ashwani Gujral has written about the use of the ADX indicator to determine if the market is trending or not. In a trending market, ADX values rise from very low values say from below 15 to around 30 and more than that is a consolidation phase or a trading market. Hope this is of some use but I have not used it personally and would like to know if metastock has it.

    Regards,
    Snowy


     
  6. rajeshksm

    rajeshksm New Member

    Joined:
    May 13, 2005
    Messages:
    2
    Likes Received:
    0
    Trophy Points:
    1

    MACD, MA etc are lagging indicators that work well only in trending but not in sideways markets(see Technincal Analysis A-Z)
     

  7. sudoku1

    sudoku1 Well-Known Member

    Joined:
    Oct 23, 2007
    Messages:
    10,898
    Likes Received:
    17,351
    Trophy Points:
    113
    right...they r the results of a set of 2 EMA of 26/12...so as with other indicaters 1 should not b carried away with this sole indicator:)
     
Loading...

Share This Page