dozu hi, when you read my post carefully, you'll notice, that I suggested to use MACD in conjunction with other, faster Indicators ( like Stoch, RSI ). I also mentioned, that the histogram gives the best reversal signals, when it's bars built out a top ( or a bottom if below 0 line and starts to reverse. As an example, I referred to the LLTC chart, whre you can see the histogram along with the MACD itself. I cannot remember having recommended to use MACD in intradaytrading. But to answer your question : Yes, I use always MACD on all my charts ( intraday or not ) together with STO 14,3,3 settings , S/R and trendlines. Intraday charts I use are mainly 5 minute 15 minute and 30 minute chart ( I don't trade much intraday, but use Intraday charts to time entries and exits on multidayswings ). And then again, there are numerous ways to trade intraday, scalping , swingtrading, S/R breakouts etc. It's also a question of the underlying trading vehicle, whether certain indicators work well or not. No single indicator is able to signal perfect entries and exits. I think, even a newbie should know this from reading the first articles about TA - which is rather an Art than a solid science. Traderkay For what concerns calculation of Histogram : The MACD consists of 2 lines : MACD line = 26ema - 12 ema = fast line Usually drawn as a solid line. Triggerline = 9ema of the fast ( MACD ) line = slow line Usually drawn as a dashed line. Signals occure on crossovers of fast ( MACD ) line through the slow ( trigger ) line. Histogram measures the difference between both lines. Histogram trading signals are given, when the histogram bars are building a top / bottom and start to reverse. A stop is placed slightly below the price of the longest bar ( Top / bottom ) Sorry, will not be able to answer any further comments until Tuesday next week.
Ok, All indicators are lagging....right?...but many people use them...they may not tell you instantaneously when to pull the trigger....but lagging or not they help with the overall direction...it would be nice to know the Direction as soon as possible...try these settings just for fun: 2,4,2 1 minute 2,8,2 1 minute 2,12,2 1 minute as a matter of fact try all different combinations with many different stocks...don't even trade...try to match up the peaks and lows of your intraday chart with the MACD...you will find that different settings work well with certain types of stocks and with how fast or slow the market is...after playing around with this for quite some time I usually can change my settings to adjust for a particular stock pretty fast...again this helps me with better interpretation of the DIRECTION. You can get all bogged down in so many bars of this and subtract this from that and the angle of the dangle...hell all you want is a good visual picture of what direction things are headed and that they are in sync with one another...plug all kinds of numbers in untll you find the combination that suits your needs at the time...after a while you will know from experience what works best
Dozu, I really appreciate it what youre doin and all but one thing I realy hate : Satire. OK, someone with experience knows that indicators suck (as I am learning now) but what is someone new to trading to do? Hes been learning all this TA for like ages (and still doesnt know jack) only to realize that its all useless and that it all comes down to developing your own system , psychology, gut, yadda, yadda, yadda. What I DO appreciate is the work someone like Privateer, Praetorian and all the others put into this board.If the ind. suck, teach the guy something he wont find in the books! As Hitman said : "It'll all come back to you tenfold if you give to the world". Traderkay, YES, MACD does suck but not if you are an investor. Depends on what you want to do, what kind of system trade. I use BBs, Stoch (8, 1, 1) and RSI (7) with Tony setups, and I must say , I would have made a bundle in the last two days, hadn't my D*** PC crashed. Cheers all, Alex
Although indicators by themselves are not great if followed blindly, merely overlaying indicators (ANY indicators that you are comfortable with) adds context to an otherwise bare and scary bunch of candles. It is the context that the indicators give to the candles that allows me to trade with confidence, even though the indicators themselves are of little use. Paradoxically, indicators are simultaneously absolutely useless (as a trading mechanism) and infinitely useful (as a context provider). Seasoned traders will know what I mean. The concept is very difficult to articulate in words. My personal indicator can be summarised as follows: A subjective combination of a) the context provided by text book indicators (without placing too much emphasis on their interpretation) b) my gut instinct, which comes from my experiences of trading a similar scenario to the one at hand