MACD (12,50,9) - Powerful Tool

Trading Systems
1

Greetings to ALL,

I am kinda new trader and still in learning phase kind.

I am guided by a Full Time Trader from Singapore which has been trading for almost 25 years.

He introduced me with MACD tool at the first lesson, and that was the last thing he tought me too

He also writing his own Expert Advisors (EA) for more than 200pcs and he doesn’t sell.

He also published books and Youtube video with his own Channel.

My point is, to be expert in forex trading doesn’t need to master most of the tools. You just need one and you be expertise in it, it will eventually turn out to be a very powerful one.

I have been trained and practised with only ONE tool (indicator), I only enter order based on MACD, while you still can have other indicators for reference, not to decide SELL or BUY.

MACD tool is pretty easy to understand, all you need is to set a suitable setting based on your trading style. I am a swing trader placing position based on M30 & H4 charts ONLY. I would never look at M1 M5 M15 charts, that is for Scalper type trader.

With MACD indicator on M30, average TP pips you would get is around 50pips, with a SL of 160pips. The risk reward I am applied is 4:1 .

Couple of tips for those using MACD and new traders trying out MACD:

  • Do not rush in placing order, you certainly do not want to burn your hard earned money.
  • Do not enter trade based on early signal by setting MACD to shorter Fast MA and Slow MA. ONLY enter trade based on 12,50,9 signal from MACD. (This is the most accurate setting using on M30)
  • Not every crossover on MACD is a strong signal to pull your trigger. Always double check if it is a strong crossover and potential to hit TP 40 (minimum TP) by checking H4 chart.
  • Do not close out order if SL reaches 159 pips. (I have experienced floating loss 159pips turned into 45 take profit !!)
  • Spot a strong crossover and enter trade, set TP 40 & SL 160, Lotsize depends on your total equilty and how much you are willing to lose.

These are the few things came into my mind to share for today. Feel free to comment and correct me if I am mistakenly given wrong information. Everyone is keen to learn better in FOREX, so am I .

Regards,
Lee LaoLang (Mr)

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Perhaps give this a little thought - i have 4 dollars which I am prepared to lose in order to gain 1 dollar.

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@peterma Greeting.
Maybe you would think that this is crazy win lose ratio, but this setting would eventually lose your-willing-to-lose percentage. It is all depends on your lotsize. This 4 dollar could be your 2% of equilty or 10% of equity.

Setting TP 40 and SL 160 is for swing trader on M30. According to Law of Large Numbers on M30 crossover, average pips movement is 40 and 160. :slight_smile:

Regards,
Lee

4

I have no view on the ratio other than when I make a decision on risk it has to be informed.

If the information were to state that the chances of my risking 4 dollars to gain 1 dollar is perhaps 90% - then my first thought is how is 90% chance arrived at.

If it were 80%, then why not 90%, if it is 50% then why take that risk - except of course if I’m a gambler - then risk is my motivator - not gain.

Then again why would I post asking guys to meet me away from BP in the first place?

5

Greetings.

I am not placing 160pips to be lost.

160pip is the average moving distance on M30 , the volatility.

We enter every trade with confident, with profit mindset.

Based on MACD powerful tool, almost 9 out of 10 are profit trades,

Well, it also depends on individual how to judge the trend and gut feeling to enter.

Anyways, you are over focusing on LOSING, the SL.

Cheers.

Regards,
Lee

1 Like
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Theres no such thing as over focusing on losing. But please give some examples of trades you take. Thanks

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@Rickster99 Greetings.

Would you enter trade when there wasn’t a strong signal showing “Yes I going to make some pips here” ?

Unless you are a Scalper trader looking for few pips and close out trade. Previous talk from @peterma I believed he is a Scalper trader too as he surprised with SL 160 while TP only 40 pips.

Swing trader has to be like an eagle, be patient and be accurate on every shot. The order is placed over longer timeframe. Sometimes up to days to close out one order.

Scalping trader can wait in front computer screen and waiting to hit close order once more than 10pips profit.

Swing trader will not enter unconfident trade, every trade we entered based on super strong signal otherwise you would end up losing 160pips.

Regards,
Lee

1 Like
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Here are the trades from screenshot:

  • Every trade TP40 and SL160.

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-Enter trade based on crossover MACD on M30 ONLY.

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If you lucky the TP40 close out by same day, or close out couple of days after.

Swing trader not everyday you get to enter trade, not everyday has strong signal. Sometimes I wait up to 10 days just for one trade. Sound crazy yaa.

Earning slow money rather than losing big amount money. Patience very much needed here.

Regards,
Lee

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How do you see if it’s a strong signal from the 4hr?

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@Rickster99 Greetings.

To check if the MACD on M30 chart is strong crossover or not, you may want to have glance at H4 chart.

If M30 is a upward trend MACD crossover (BUYING), you will find H4 chart is in downward trend momentum.

Vice versa if M30 is a downward trend MACD crossover (SELLING), you will find H4 chart is in upward trend momentum.

You may want to set a Moving Average 50 on H4 chart to check the pips difference between current price and Moving Average. The pips difference more than 40pips is consider a strong crossover on M30 MACD, where usually can hit TP40 if u entered trade. The pips difference less than 40pips is not adviseble to enter as it is weak crossover which may not hit your TP40 and reverse trend.

Trade only during high volatility period where 2 markets kick in.

Regards,
Lee

1 Like