I have been using MACD (12,26,7) on a minute by minute tick for the NQ and ES futures (Nasdaq-100 mini and the S&P 500 mini on the globex). So far (For the past week) I have been getting good point returns (Net +6 points a day). I wanted to get some feedback from others with a longer history of experience with the MACD and other technical signals. Here is the specifics of my approach. I buy when the MACD crosses the indicator line (The 7 period EMA of the MACD line itself). Once I've bought, I set a limit sell order of 2 points up from my buy price. I either sell at this point, or whenever the MACD crosses back under the indicator line. I do the reverse for short swings. My goal is repeatability, ie, being able to get many 2 point hits throughout the day, versus catching one long swing over a longer period of time. So far so good, but this market has been particularly volatile, so this approach may not work over the long haul. That is why I wish to learn from those who have been in this game much longer than I have.
Many traders can make profits via the MACD and many will lose money via the MACD and call it worthless. Therefore, its the trader that's applying the indicator (any indicator) that will determine if they succeed or fail. It's great you've become comfortable with using the MACD (I use to use it a long time ago). Howerver, remember this...use something else to confirm what the MACD is revealing to you. Some successful traders use price moving averages, candlesticks, volume, bollinger bands or something to increase the probabilities that the MACD signals will be profitable. Come back and tell us how your doing via the MACD a few months from now...what you found to be it's strength and weakness. NihabaAshi
"They say" MACD is great in trends and Stochastics are great in consolidation. However, given the time frame you are using, the most significant caveat I see is trading during periods of relative quiet. Although, even then, you are only looking for two points and I am unfamiliar with the minute by minute volatility of the ES or NQ. I need to check this out, because I love the MACD, however I use it to confirm and detect divergences. Good luck with it!
hmm, what is "minute by minute tick chart"?? Do you you mean 1min timeframe? Or you do you mean a constant tick interval such as 144-Tick... or what?
hybrid, The system you describe is an excellent one. I blew out a clients account in the 80's trading S&Ps using a 5 over 17 min crossover. 2 pt stops are good. Don't tweak the parameters. Works well at one minute, but very susceptable to whipsaw at longer durations. The failure of simple systems is when traders focus on what they are missing instead of what they are reaping. A sure way to ruin your good thing is to try to make it perfect. Most traders add other confirmng indicators. (come on down to the futures forum, that's where all the emini traders hang out.)
Listen to profitseer hybrid, at least consider his thoughts. He is the master of maintaining simplicity. Think about what he is saying. And read his previous posts also. You will be a better trader for it. And remember...
It all needs to fit into a style. Since my trading stlye is basically tape reading, I do not use the MACD indicator. Others are different I am sure. But the point is - it all has to fit into a trading system... your system.
I was up by 1.75 for the day. I was up early by about 7 points, wasted that lead by 6.25 points, then got two .5 point gains. Not great, but ended the day positive. Can't complain