LBR is Linda Bradford Rashke, she is big on the 3, 10, 16, macd so I wanted to credit her, as that's where I learned about it. I use the 3, 10, 16 because it is more robust. It seems to get me into more trades and into the trades earlier than the canned settings. I'm just going for 1.5 points, so I need to use an indicator that is sensitive enough to get me into these scalps in a favorable position. I am watching both macd's, but get most of the entries off of the 3, 10, 16. I don't use any SMA's. I do have the 20, 40, and 60 ema on the chart, but don't use them for anything for this system. BTW, there have been 13 signals today, which is a lot. 5 of those were garbage during the noon hour, but I want to take them all until I do a little time filtering. Last signal is long at 774.30 with a 773.30 stop and a 775.80 target, if I get a reversal, I will just exit and not reverse this late in the day.. So far, 5 winners and 7 losers and 1 still active and a 2.3 points per contract profit. Worst case scenario, I'm up 1.3 points per contract today on 13 trades. Best case, up 3.8 points per contract. There have been a lot of signals today, but you don't know which ones will work. Last week there was a 9 signal day with over 10 points of net profit, so you do have to take the good with the bad Even if I net out only 1.3 points today, it's still okay with me. I'm sure we all know someone who would love to take our place.
I took a quick peek at the 3,10,16 MACD and it didnt look that great with the YM. But once I start toying with the ER2 I'll have to check it out. Another 8 point trade just now, that I could have stayed in but got out anyways. It was only 8 points, but thats over 40 points YM today. 1.3 points or 3.8 points, either way you look at it, not too bad...
Bailed at 775.00 for a total of 3 points on the day. Not bad, for an 8 point range day. I'll take it. I'll probably not be posting these trades in the future as you can read what's already on here to get some good ideas. I will check in to answer any questions, but the trade posting can get a little distracting. Good luck to everyone !!!!
If you could post once a day at the end of the day with a chart and maybe some annotations that would be great!! I fully understand how hard it can be to give live updates and trade properly at the same time. Thanks again
Donkee, I don't see the divergence on trade #3 you posted. I see a higher low on price and higher low on MACD ? Please clarify and thank you for an excellent post. What time zones are you finding so far to stay away from ? Cheers
After you watch these markets for awhile, you'll see a lot of double tops or double bottoms that re-test, but do not make new lows or highs. The divergence was there on the 3,10,16 macd, but you're correct, prices did not make a new low (they came within .20). You'll see the YM did the same thing at 11:08 and 12:56 for a couple of beautiful signals. The important part about these trades is prices re-tested a previous low and momentum diverged. Don't get too hung up on whether prices make a new low by a few ticks or miss a new low by a few ticks. When you get the divergence and the macd comes back through the zero line, take the trade. I call it a Zero Line Cross, ZLC. It's not perfect, nothing ever is, but it seems to give you a good boost in the right direction. Remember, I'm only looking for 1.5 points per contract on the ER. As for times to stay away from, just the usual, 11:45a-1:00pm est. Lunch time in New York has always been tough to trade. It is usually just a bunch of jerking around until the big guns come back from lunch and decide which way they want to take it.
Hi Donkee, I appreciate the reply but IMHO the very word 'divergence' means something is going one way and something is going in the opposite direction.....so in theory price should be going one way (ie: higher high) and MACD should be going another way (ie: lower high). Of course there is no need to get hung up on the details but perhaps you should just note that some ZLC's are taken after divergences as well as some are taken after retests of prior lows or highs. Please don't take any of this the wrong way as your post was excellent I just don't want some rookies getting confused or looking for divergences only when they can infact take a ZLC after true divergences as well as ZLC's after tests of prior highs or lows. Thanks again, cheers
Trader28 - Sorry to bring this post back up, but I hadnt seen this part yet. Ive still been using the 9 SMA. First off, the 3 SMA +2 horizontal shifts is to get better entry and exits. The 25 SMA is to determine when the trend ends. The 3 SMA will pop in and out of price, but when the 25 is breached, the trend is definitely over. All correct? The 3 SMA is to fine tune exit and entry points, but Im not sure if I can modify it with the 'horizontal shifts' with Sierra charts. Do you think that I can still use the 9 SMA for entry and use the 25 SMA to determine when the trend ends? Or is the 25 not even needed if Im still using the 9 SMA? Hopefully that made a little sense...