Macd

That's the part I could use more help with. The MACD looks much different in real-time as the bar is being developed. (ie. The tail is being flapped and giving false signals.)

A few of your entry dashes placed on the chart are at price points a person would never get waiting for the 1/2 macd value or the zero line cross. (ie. they dont signal til the very end or beginning of the following bar)

Also, if you are getting a real nice short signal and a resistance level is 3 points away, do you enter or miss the possible big trade.

Is all in/all out not as profitable as scaling?

These are the things I scratch my head with. Thanks for the posts AMT.

 

Reiehaxm,


I only go for +1.00 point for 50% of my initial trade entry position and then I cover another 25% of my position at +1.50 points.....this is from previous testing I have done so the system can make money in the chop. Today is not the normal type of trade day (daily range average) so on days like this your remaining 25% of the initial position is all you will have to grab the big runs. But how many points a day do you need to make great profits each month.....my targets are biased towards probabilities not towards hitting homers. A day like this is why I keep my targets tight.....

http://www.ttrader.com/mycharts/display.php?p=31161&u=cktrades&a=CK Trades&id=1303

On a day like the example shown, I want to finish this type of day with some profits....not with a bunch of whipsaw losers.

Now as the MACD is flipping around prior to the end of a 5 minute candle, I always try to pick a price level that if touched would either put me into a new trade or reverse an existing trade. This is why at times I will enter trades "during" the formation of a candle, because If a high or low of a previous candle is being touched then I will enter a trade even though I do not have a 100% clear picture yet with the MACD. Sometimes I may only have about 90% of the picture until the current MACD line segment is "printed" and locked in at the end of that 5 minute candle. This is not that hard to figure out once you spend a few weeks with this method and you are then able to "know" when a certain price level being hit or broken will cause the MACD signal line to achieve a certain positioning in relation to the "zero" line (or 1/2 Value line). Trading can not be an "exact" science or this would be too easy, we have to use or minds to evaluate a set of conditions and then determine the probabilities of an outcome. Here is an example, take a look at these charts and think of what price level if touched or broken would get you into a trade.....
____________________________________________________
Price Action.... http://www.ttrader.com/mycharts/display.php?p=31435&u=cktrades&a=CK Trades&id=1303

MACD and volume.... http://www.ttrader.com/mycharts/display.php?p=31436&u=cktrades&a=CK Trades&id=1303
____________________________________________________

Price action one candle later....http://www.ttrader.com/mycharts/display.php?p=31438&u=cktrades&a=CK Trades&id=1303

MACD and volume one candle later....http://www.ttrader.com/mycharts/display.php?p=31440&u=cktrades&a=CK Trades&id=1303
____________________________________________________

Price action over the next few candles.....http://www.ttrader.com/mycharts/display.php?p=31441&u=cktrades&a=CK Trades&id=1303

Now did you pick a good trade entry? My point is the CURRENT period of your MACD signal line which is flipping all around until the very end of your current candle, is not required to be fully locked in and printed. You should always be looking for price levels that if touched or broken would get you to enter a trade from the evidence you have so far (when the MACD is right near the "zero" line or a "1/2 value" line). In this case a 1200.75 or 1200.50 SHORT entry would have worked out for a few points. This price level area was the low of the last two previous candles and the MACD was bouncing around a bit right at the "zero" line after a lower MACD peak then about an hour earlier (also price action had just made a lower high then just over an hour earlier....decent SHORT signs).

This style of MACD entry is the culmination of several understandings packaged together....price action....volume flow....S/R levels....indicator analysis. Not one single element by itself directs you into a trade, but rather a combination of events directs your trade entries. Does this make any sense now?

AMT

 

AMT

Thank you for that reply. Explaining your thought process while considering a trade is very helpful. ET at its best.

Earlier in the thread you talked about the stochastic indicator but have not seen it in your charts lately. You had said it was around 25% of your trade decision if I remember correctly. Is that part of the equation being left out on purpose as to not confuse - or do you only use that on certain price action?

Thanks for sharing

 

I always have the Stochastic up on my charts during the day (5,5,2 Stoch), but I have left it out of most of my chart examples so the MACD will be taller for the screen shot images (some of the images are a screen shot from my PC at home and some are from my trade office LCD's....just depends where I am at when posting here). This way the image is as clear as possible to see the MACD better for the examples I use. So yes the Stoch info is a 25% decision input for each trade I enter....just remember that a Stoch indicator is more likely to diverge from actual price action then the MACD when these settings I have described are used.

AMT

 

You guys remind me of Y2K...

What will you do if resolution adjustment of TA stops working?

Look at MA... oh... maybe you'll make "MA"CDCDCDCDCDCD... in a few years, after you...

 

AMT4SWA, I've seen that the break of the "half-macd" value usually results in a price congestion zone around the 10ema

Am I just seeing things ? Or have you noticed it too ?

If yes, then does it make sense to enter trades when prices are just beginning to congest ? what's your stop-loss point for such trades ?

The zero-line break is usually more conclusive and does result in continuation of the trend in direction of the break.

just my 2cents ofcourse.

 

Wanderer,

Yes the "1/2 Value" entry can be of a lower probability so you have to be aware of this. Now if the MACD ever runs beyond +/- 2.00 then I will not do "1/2 Value" entries unless I see a good shift in volume or if price action is really running counter to the trend which caused such a high/low MACD reading (watch for this type of scenario in a real strong trending day.....in this case you would NOT take a "1/2 Value" entry, but you would wait for a "zero" line break). Now you have to use a 1.50 to 2.00 point stop for these trades as you get the occasional quick move that gets countered right away.....you do not want to use a tight stop and get stopped out at every little whipsaw. When price action is wild I am more prone to loosen up my stops, and when we have clean trend days then I feel more comfortable with a stop at only 1.50 points. My stops are not hit that often anyhow, as I reverse my position direction frequently as the MACD gives a new indication. Here is today....we had a good wild day with some nice moves at times and the tight profit targets are really needed for days like this......

http://www.ttrader.com/mycharts/display.php?p=31490&u=cktrades&a=CK Trades&id=1303

http://www.ttrader.com/mycharts/display.php?p=31491&u=cktrades&a=CK Trades&id=1303

As you can see from a day like today.....sometimes the "1/2 Value" entries help get you some slight price improvement over waiting for the "zero" line breaks.

 

AMT,

I was looking at your charts for today and was wondering how you would handle the period between 12:35 and 1:25. It looks as if you may get whipsawed in this period using the 1/2 value macd trade.

The stochastic 5,2,1 seems to work well with these congestion periods.

Also, do you have a volume constraint for the 1/2 value trade?

thanks.

 

Nwbprop,

Yes that was a heavy volume fight in that time frame so you just keep with the program until the fight gets resolved with a winner.....the LONG's won and the LONG trade at the end of this period was the payoff for all the whipsaw action. You will never have a system that is perfect all of the time, but if you stick to a program of method then the probabilities will pay you in the end. When the price action jumps around a bit in this type of volume flow, then you just have to go with it until you get a nice breakout.....if you start to pick and choose trades in these areas you will miss nice runners too often. The tight initial profit targets also help achieve some profit hits during these periods. When this type of price action is taking place, just be patient and take a look at the bigger picture...always keep an eye on the 15 minute chart to help you analyze what may be setting up when this type of price action plays out. You need to have a very stable mental state when price action can not make up its mind which way it wants to go....just stick to the same actions you would take when the price action is clean as the MACD is giving a signal.

All 5 of my trades today from around 11:00 to just after 13:00 combined together were just slightly profitable....and this is exactly what you want when the market is in these type of price action periods. As long as you hold water in the whipsaw and chop, then you can make the nice hits when you get a clean run. The trade after this period then turned out very good once a breakout occurred.

Now as far as volume goes....I do not really have any minimum volume limit for entry during the day session....but I just watch to see if I can see a bias to the volume flow that will be in support of my intended trade direction.

 

AMT,

Thanks for the quick reply. Looks like I am not the only one perusing the boards at 1 am. Shouldnt you be hanging out with your 26 yr old wife

Anyway, I have noticed that a bid/ask volume switch usually occurs before the 1/2 valley trade. It seems like we are waiting for the indicators to confirm the volume most of the time. I also noticed that their might be some significance when the bid/ask volume descrepancy > 2500.

Their also seems to be 2 different types of 1/2 valley trades. One occurs when the macd peak is outside +/- .5 and the other is when the macd peaks occur within +/-.5. Do you handle exits/profit targets differently depending on where the macd peak occured(congestion or reversal from trending)? I really like the entries, it just seems that the exits are key.

Thanks,

JC