MACD is it really that easy???

Discussion in 'Index Futures' started by Westward, Jun 3, 2009.

  1. Westward


    Not saying its the holy grail of technical indicators but is it the holy grail of technical indicators?

    Look at any intraday chart and tell me if you agree that about 90% of the time when the FAST LEN breaks through the SLOW LEN, either on the upside or downside that a substantial move follows.

    This is a contrarian indicator signaling a reversal, at least in the short term but it works man.
  2. NevouS


    one of my fav indicators, but i use it with the smooth rsi w/ stoch and other advanced indicators that you need to buy >___<
  3. Put up a chart or two....
  4. You got it backwards.

    When a substantial moves occurs, the Fast line breaks through the Slow line or vice versa. MACD is not a future predictor, it is a repeater of what just happened. Can be a useful tool but moves dont follow MACD, MACD reflects moves that have occurred.
  5. Westward


    Wrong. It presents a real time shift in momentum. It is a future predictor. It isn't the greatest in a sideways market but after a steep move, its dead on at confirming the end of a move or presenting a reversal opportunity.
  6. It may produce many false signals especially during a trend. I would not recommend you to use MACD "as is" but in complex with other indicators and TA approaches.
  7. Short answer, no, it is not that easy. Combining it with another indicator or indicators, all of which measure pretty much the same thing, will not make things any better.

    MACD is actually pretty useful, just not in the way you are trying to use it.
  8. At what time frame is this true Westward.
  9. No, it's not that easy.
    Just get Al Brooks new book "Reading price charts Bar by Bar", start on page 118. When you're thru with that chapter, flip to page 353.
    Read it all 100 times, paper trade your favorite setups 100 times.

    When learning to play bagpipes, my teacher said if I could play a tune perfectly, up to speed, 100 times, then the finger movements and breathing control would become part of my cellular structure on the atomic level.:D

    Maybe not literally, but you get the point.
  10. LEAPup


    #10     Jun 4, 2009