Bulat, I put this together over the past few years after spending a lot of time looking at charts with different MACD settings on numerous time periods (3 min, 5 min, 15 min, daily, etc). This is just what I ended up liking the best from everything I had tried. The traditional two line MACD is just not very effective IMO for good signal generation, so the "1/2 Value" and "zero" line breaks are just an alternative to the two line style. I will forward a copy of some basic rules to you that I have PM'd to others that have requested. A lot of the basics are covered in this thread though.....not real hard to use IMO. Actually at this time I am checking out another MACD method for an "automated" system possibility....I need to go to bed....LOL!
AMT.....could you explain why the 1/2 value long was not taken right before the open or shortly after. I have a peak -.8 reading and a high of -.2 right after the open. Volume or stochastic saying wait? Thanks
Yes, that area was just totally flat from a volume standpoint so I just held what I already had.......plus these indicators are not as precise when the price range is in such a tight few tick range and volume is almost nil. Plus I wanted to "take/then stay" in a trade with the direction of the last part of the overnight session which was downtrending (the ES was downtrending from the 02:15 to 02:20 a.m. CST candle, so I was looking for a SHORT entry as I saw no evidence of a counter move to this trend).
Today was another very good day with several oscillations for some nice hits. We had several moves today that were supported by some really good "out-of-balance" volume pulses. Here is todays charts............. http://www.ttrader.com/mycharts/display.php?p=31668&u=cktrades&a=CK Trades&id=1303 http://www.ttrader.com/mycharts/display.php?p=31669&u=cktrades&a=CK Trades&id=1303 We had one "zero" line reject LONG trade today as UP/DOWN volume did a quick flux change at the 13:55 to 14:00 CST candlestick....I had to do a quick reversal there as "buy to sell" side volume changed to about 2 to 1. This turned out to be a nice little run for a few points, and then we had an equally nice quick sell-off at the end of day. Todays open started very good with a nice LONG trade that was supported by a really strong "out-of-balance" volume surge. When this happens you have to get in quick when you see very near term S/R levels met/broken (in this case 1206.50 had held for over forty minutes as resistance.....when volume poured in and the price ran up to 1206.50 that was a very good entrance for a LONG trade as the MACD was piercing the "zero" line). I hope we keep these days going this week with nice volume swings and decent price action follow through...well see tomorrow.
Today worked out very good as we are getting some exceptionally clean price action moves.....I really hope we can keep this up for a while! Today I had one "zero" line reject trade (which is labeled on the chart), and the rest were all straight forward "zero" and "1/2 Value" line break entries.....here are the charts for today............... http://www.ttrader.com/mycharts/display.php?p=31689&u=cktrades&a=CK Trades&id=1303 http://www.ttrader.com/mycharts/display.php?p=31690&u=cktrades&a=CK Trades&id=1303 This is the type of trade day where you should be able to bank a lot of points. I am looking forward to tomorrow and I will be watching the oil inventories report time period closely.
AMT4SWA, do you only go as low as 5 min charts, or do you ever drop down to lower timeframes? It seems like a 3 min chart usually has enough range for some decent moves, but with the advantage of more trades on any given day.
AMT4SWA I don't understand the reason for going long at approx 9:55 on your chart. I see no signal. tia
Bulat.....sure you can use a 3 min (actually the three minute works the best in very tight range days....like some holidays or July and August when the market sometimes seems to slow down a bit from lower volume), but with the range days we have had here I would stick to the 5 min IMO. Eminitrader_1...... That was a "1/2 Value" line "re-break" entry as the MACD broke down through this line for a SHORT signal and then price action changed as we had a volume shift so the MACD re-broke this same line upward.....LONG signal then. In a sense, the MACD rejected the "zero" line without "zero" line contact, and the MACD moved back north again through our "1/2 Value" line so you take this as a reverse signal.....in this case a LONG. If I remember right, this part of the strategy is mentioned here in this thread if you need additional clarification. The "zero" line with any MACD setting is a significant area when broken....so at times you will see the MACD bounce or reject very near the "zero" line so keep this in mind.
hi emini, i have been watching this thread for a while ...and im sure amt will let me know if i am wrong but i think the answer to your q's is that a long was taken as the half MACD line is broken to the upside , im not sure if this acts similar to a zero line reject(and therefore higher probability trade ) ALSO a question to u amt on the chart showing stochastic dated 2/3 would i be correct in saying that the 2 trades around th 11.30(short) and 12.20(long)..should not have ben taken as the stochastic was showing oversold and overbought?....just trying to piece things ...and once again thnx for your posts, very helpful.