Andy, your statement.... "Are they doing this as 2 separate systems? Or are they able to assess current market conditions so they can switch back and forth? Interesting, I'll have to keep an eye out for their posts." For me I am in separate systems that could or can be blended at any time....today I did discretionary trading off the 5 min/15 min set-up while I was also in one "semi-automated" trade that enters off SPX S/R levels being broken (SHORT trade as we broke the SPX below the 1200.00 area)...now depending on how any of the two trades is working out, I could hedge one position with another....or I may borrow entries (add's) from one trade and then splice these into another to achieve a certain cost/entry price basis (if the two separate trades are going in the same direction....like one system SHORT from one price basis and the other system from a different price basis). Another method is to continually cycle positions in and out to try and better your overall trade cost/entry price basis if you are in a longer term trade (like two days to several weeks....swing type trading). Today at one point I was in several SHORT trades all at the same time....one discretionary....one "semi-automated" (signals to the broker, then he handles the trade).....and two fully "automated" systems. Now on a chop day I might have two systems trading one direction for their targets/objectives while at the same time one or two different systems are trading the other way (just depends what product/instrument the system is trading and what is going on in the market at the time....you never know).
Very interesting charts; thank you for posting them. Is this "4,13,1" your standard setting for the MACD for these purposes?
AMT4SWA , thanks for the detailed charts. questions- (1) Whats the success rate when using MACD (a) zero-line-break entry ? (b) half-peak break entry ? (2) What's the reason for using both DMI and MACD for your entry signals ? please advise.
thanks AMT. Separate methods is what I was sort of thinking of too As far as accuracy, were you guys able to get very good results? When I traded RD's I think I got around 55% Not that good. Maybe that zeroline trigger would have helped. Exits was what gave me that slight edge. I don't trade RD's anymore because I wasn't able to figure out how to make it perform better. I now trade the opposite of RD's. http://live.tradingmarkets.com/p91885345 The first setup he talks about is Reversal Divergence, what we've been talking about. The next setup is what I do. Continuation version. I don't know why he calls it reversal divergence. I call it something else. I found this setup to be more reliable than the one we've been talkin about. Sometimes my setup occurs right after a regular divergence. If you pay attention when the guys talkin about my setup is that there's a regular divergence just before.
Wanderer - your questions - (1) what the success rate when using MACD (a) zero-line-break entry ? (b) half-peak break entry ? (2) What's the reason for using both DMI and MACD for your entry signals ? please advise. A. - I have learned the behavior of this MACD set-up over time so I have a very good success rate with the MACD/Stoch combo that I use.......these indicators are like your kids when you spend a lot of time with them.......you know when they are telling the truth and you know when they are BS'ing you....LOL! A. - The "zero" line break is a significant event when you have other supporting inputs.....volume flow....Stoch readings.....recent previous price action S/R levels. As this is not an EXACT science when entering trades, you are just looking for a preponderance of evidence in your desired trade entry direction prior to the actual entry.......all probabilities. A. - The "1/2 MACD value" entry is more of a lower probability entry and I only use it when everything else looks good to me (like, what is the Stoch/Volume/Price action doing....if I like what I see then I enter a trade off this criteria). This works best when we have the MACD at least beyond +/- .50 (if less then this value, I just wait for the zero line break) . This method really rocks when the market is in a sideways oscillating type day with a tight range (like congestion or consolidation days after a big run up or down). Again like other aspects of all trading methods, I know from experience when to use which type of entry. I will say though, that the "zero" line break entry all by itself is very strong method (how more simple can you get?) as a person gets some time under their belt using it. A. - The DMI/ADX you can ignore......that was just on the chart for something I was trying to show someone else.....use the 5,5,2 Stochastic as your prom date for Mr. MACD.......just make sure he brings her a flower! tradersaavy - I did some back testing for these targets....actually my "automated" version of this strategy goes for only 3 ticks and then pulls off 75% of the position, and then lets 25% ride with a combination of exit possibilities.....this way I have a majority of the position pulled with a very high probability target for a very good profit hit rate. :eek: :eek:
I was wondering if you could elaborate a little more on the use of these 2 combined indicators. I have been using the 5,3,2 stoch in combo with the 5,13,6 macd and never could put it all together. Are their significant levels for the 5,5,2 stoch like neutral is for the macd? Maybe the 50, 80, and 20. I totally understand if you think you are divulging to much by answering these questions. Thanks.
AMT4SWA, thanks very much for explaining this trade set-up in such detail. you've been extremely generous.