DT001 You speak of and ask about several things regarding the MACD as used on the ES. 1. signals 2. configuration 3. late entries and late exits 4. How to be a bit earlier. Six respondents confirm they do not use MACD: TD, AH, ICBD, LU, MA and two Wo's. They, collectively, have looked and dropped the use of the MACD. They have good reasons for not using it and none have anything to do with the MACD. QED. Two others use MACD and they made suggestions or further inquired of you for information. You have not been responsive. Appel designed the MACD for the S&P and he did it before the ES was invented by the industry for smaller traders. MA's are used in the MACD as % but that is not evident. Originally the level of go/nogo was 2.5 for the S&P and 1.2 for the NYSE. Plus or minus was used for overbought and oversold, respectively. So you have been asked: a. what signals? Xover?, hist? b. timeframe c. experience in terms of time. d. is there more involved than MACD? Popular usage has gotten the results you see from the six persons mentioned in the first group. They drop it because "It doesn't work for them". Making the MACD work for you The first clue is that the originator chose values away from neutral to make the determination he desired. Keep this in mind as you begin to use MACD. Secondly, as with most indicators of reknown, doing it once is not enough. The concept, underlying, is used twice in the same vein. this gives us the carrier concept. The first iteration carries the second iteration and so a slow dynamic curve is being intersected frequently by a faster dynamic curve. This brings us to making money on the ES. We need to tune the MACD to the ES. The tuning has always been recommended by the originator and, if not, by his successful successors. That happened in the past when milestones in the financial industry occurred. You see that you are not getting results and you were told that you were not tuned in properly. (KU). YO asked about your time frame. The origninator said to use MACD on several time frames and he said the faster time frames would lead the slower time frames in terms of significant signals. The carrier is a difference. Because it is, none of the elements of the difference can destroy the ability of the indicator to see the non stationary features of what makes money: price change. If a factor in a difference is longer than the cycle of price change, this factor, all of the time just sits on top of the price cycle. It does not hold the price cycle up since the price is always of one specific sign in value (+). If this is the case, then the factor "floats" on price and bridges the cycles of price. Bridging means that the end supports of the long factor are always held up by at least two paeks of price. So the advent of electronics communications (after the hpone was no longer the modus) shortened the price cycle and all indicators at that time had to be shortens likewise to preclude bridging. Take the six respondents who dumped the MACD because it didn't work. They all (100%) never fixed the configuration of the MACD to make it functional. Some people in this world cannot get things like tehnological change. as a humorous pastime I tracked all the gurus to see how long it took them to change to new defaults. I also tracked the leading platform providers to see how long it took them to change the defaults. Life has handed all of us a defualt change. the MACD, for the ES on all fratcals is 5, 13, 6. Notice that 6 is between 5 and 13. For you, this brings the ES into focus when using a PC. The common signals of the MACD deal with: OS/OB, Xovers and divergence. Making money involves timing and these three timing characteristics do not do what is demanded by some people. recently a person explained why a system was no good: It did not give specific flashing signals for doing what he insists on doing to make money. He insists on Wizetrade (three of a kind lights)or InvesTools (5 of 13 lights). For example: Divergence in MACD means something is coming up soon and Xover means take action to sell or buy. You may have noticed that Convergence is in between Divergence and xover and nothing is signalled according to the originator. Consider four more signals from the MACD: MACD trendline breakouts; the neutral MACD crossover, the MACD histogram and the entwining of the carrier and it's other curve. The MACD also goes through a sequencing of it segments (the various conditions that prevail as time passes from one state to another). In short, people who use the MACD successfully have a strong and very reliable tools at their finger tips for making money in a very timely way. One of the things that becomes clear from this indicator and Stochastics which is equally powerful, is that money can be made all to the time the markets are open. Indicators, all in common, tell everyone that the dynamic of the market is always available for making money.
<i>"HAI GUISE, can you tell me of an indicator that gives no false signals."</i> Everything on a chart gives "false" signals from time to time... everything lags the next price tick to come. That's what stop-loss orders guard against. Of all tech-analysis tools, price movement is hands down the most reliable. A lot of other things (in combination) work to lesser degrees than price movement.
The MA's are EMA's just to head off the Q's you are going to think up. An MACD trendline is drawn to the right of the MACD fast line and it takes about three cycles of the D, C, xover sequence to go from the extreme MACD to the neutral of MACD and then three cycles more to get the the extreme of the MACD of the opposite trend. An MACD trendline BO is when the right line is broken by the carrier curve and the other curve. The originator used the carrier curve as the "signal" curve. The overb/overs values are as found in my first post. As usual, you need to do work to learn. Work is done on charts to raise questions. The questions get answered by critical thinking. You do not have the books nor do you have the platform. Trading signals, meaning all the signals for knowing what is going on, are numerous and replete with high quality information. Price and Volume are sufficient for making what is offered. Indicators parallel price and volume and they are always in synch once the trader has a functioning market display. Today was a 10 points in ten seconds day. Obviously by always being on the right side of the market, a few chips fall to the trader.
Mr. Hershey, There are a few typos in your last post. Recognizing this isn't English 101, may I respectfully propose you lay off the scotch before posting. Cheers!
You keep saying that... then would you mind explaining something to me please? Attached at the first link below is your paper, "Catch Up with Tomorrowâs Paper Today," (adobe llamingos publishing) in which you describes the P,V boolean relation and how to score it. http://www.elitetrader.com/vb/showthread.php?s=&postid=1278985&highlight=buying+boolean#post1278985 On page 8 of "Catch Up with Tomorrowâs Paper Today," you say to buy at the turn from 0 to 7.... you mention no filters or further requirements. But when I tested that on 1000 S&P stocks over five years, exiting 5 days later* I got the equity curve at the second link. Why doesn't buying that turn give at least some advantage? * 5 days worked better than 1,2,3, or 4 days. http://www.elitetrader.com/vb/attachment.php?s=&postid=1278986