Ok rip a tune Boris here we go with charts.
I still prefer the pictures being placed on the post immediately but the program for this forum appears to be a little primitive and could do with upgrading.
Two indicators are shown : MACD (19,26,9) and Guppy Multiple Moving Average. Bolinger bands have been omitted for clarity but i do like to look at them.
[B]To open charts :[/B] click then open (open again if necessary). Close all other programs and tile vertically or horizontally to allow [U]post reading [/U]at the same time as [U]chart viewing[/U].
[B]Chart A :[/B] This chart shows the MACD all over the place but the GMMA long, ([B]red[/B]) is level and narrow, depicting an unstable oscillating trend. Anything could happen. The GMMA overrules the MACD and tells you to stay out at this time and wait.
[B]Chart B : [/B] Chart B show the MACD trigger line crossing at A, giving a [U]short [/U]trade, but the GMMA long is level at this point and overrules the MACD and we stay out of the trade until near point B where the GMMA long starts to fall. The GMMA long widens, showing that the trade increases in strength going downwards.
Point C is a good entry with the MACD and GMMA in agreement.
[B]Chart C :[/B] Chart C shows the MACD trigger line crossing at A, giving a [U]short [/U]trade, but again the GMMA long is level, directing a wait. We enter near B where the GMMA falls. Point C shows the MACD trigger line crossing, giving a [U]long [/U]trade, but the GMMA is very wide showing a strong downward trend. We wait for the GMMA long to show signs of turning and, therefore, enter near point D.
Whenever the MACD and GMMA long diverge, the price action takes the middle road and goes level, ie nowhere. It is, therefore, important to have both these indicators in agreement otherwise a MACD entry will cause a long waiting time with frustration before anything happens.
Regards, Tymen Wortel, Perth, Western Australia.
chart A.zip (72.1 KB)
chart B.zip (79.8 KB)
chart C.zip (81.4 KB)