So basically you watch the MACD for a cross and enter? I’m looking at your charts here and it seems pretty close to what I’ve been doing. I’ve been watching a slow stochastic when it crosses up through 20 or down through 80. Then I use the MACD just to estimate what kind of momentum I’m looking at. A combination of trendlines and support/restistance to get an idea of where things are heading. Then I use Fibonacci retracements to estimate my TP. Cross my fingers and enter… I’m doing better on a 5 or 15 minute chart…the longer the time frame the more stable it seems and I’m less likely to panic! I’m still really new and trying to form good habits early on.
I traded EUR/USD today from 09:42AM to 11:00AM and gained about 75 pips in 4 trades. My goal is 50 pips for now…wanting to shoot for 100 as my account grows a little. So I was out for the day.
I’m trying to follow your system, but what indicator is your chart showing for MACD? I put the MACD on mine and it’s not looking like the one you’re showing (which looks like it says MACD Crossing). Is this a custom indicator? Also, I can’t see how to calculate the distance from the signal line to the MACD as in your formula.
You mentioned 20 EMA also. What settings do you use (applied to close, open, median?).
This system looks nice and I’d like to try coding an EA (you obviously already have but I’m guessing you’re not going to post it?). I just want to make sure I have all the details correct.
YES and No… yes the macd cross is a component naturally built into the formula but the formula itself is different. Entering based just on macd or stochastics is a bad idea as it is low probability trading… you look like you got a system for it tho to raise prob.
I look for crossing level if you look at my charts while i post entrance from .5% -3%… thats just the way to learn the system often enough once you get the basic idea of the PA moving away from significant MA’s you start to see the elasticity of the market and how it moves stretches and snaps back i usually enter while - macdC% and slope changes positive especially when price action is in the upper statistical quartile for its PA based on significant MA’S or around where it would be considered an extreme PA @ >90% this also seperates you from the herd because you hit entries that people dont see … using MACD STOCH CROSS your probability is that your herd trading why is this bad because the more experienced traders see this herd action and use it against them thats why often when you set stop losses on something that would be considered herd movement it blasts back to stop loss area then snaps back to entrance then makes its move.
so in my system i find entrance based on something most people do not consider and thats MACD DIVERG. CONVERG with relation to actual price action.
when a pair gains momentum and move in direction the speed it moves and inertia shown by the pair will pull it further away from a big MA… the MA is like the dantien, base, or center of the pair the further it moves away the more volitility and unstability you see. it can also only get so far before it consolidates waits for the ma to move back up to it before it resumes its movement or snaps back to the ma. THE higher the Clevel% the higher the prob of a snapback like lets say a pair grows for -1% to 2% at 2 % the price action wont consolidate itll move in a steady direction because at 2% is healthy growth for the pair staying close to the large MA and still growing. if it hit 5% its gonna be further away from the sig ma and will probably consolidate until ma catches up then resumes movement… while at something like 12% we are way far away from the base and it cant keep up this movement and cant hold a consolidation at this point so it has to move back to the sig ma.
stability also has nothing to do with timeframe. The timeframe is a different layer… different layers should be traded differently…
you can see a perfect setup for your trade on the daily and take the trade and actually hit a margin call or stop loss if you entered at the wrong time even when the setup looks perfect.
anyways ill be covering stuff like this in my next few posts if you care to check back
Its not that macd indicator its a custom indicator called MACD CROSS LEVEL.
The distance from the macd to signal line is just # of macd - # of signal line
then to created the ratio with Price just take that
((macd-signal)/Price)*100
its a 20 EMA applied to close
by EA im gonna assume you mean expert advisor? no i didnt code one just a custom indicator.
im gonna post the mql4 for V1.0 of my indicator i use a revision but its more then tradable ive made boat loads of pips from it. im just thinking about how to structure my next few posts.
Divergence is misunderstood by many traders. When price is making higher highs but the indicator is making lower highs, you have a divergence and it’s time to look for a short signal. There will be many pips to gobble.
MACD made a lower high when price made a double top. It looks obvious in hindsight. When trading live, don’t jump the gun at attempt to short the top. Let price establish a lower low to signal weakness and that’s when you can enter short.
check out that Eur/USD with the MACD CLEVEL chart set at two time frames
as i see it youll see i bit more upward direction probably one bar - two bars
end that period of consol. and well see another run down open your shorts on this baby on the d1+2 and youll gobble some pips
Thanks…that helps. One thing I’m still not quite clear on. You use distance from the signal line in your formulas but I don’t see the signal line on the chart. If it’s built into your custom indicator, how are the TP and SL figured? Is the histogram that’s displayed showing the MACD (to use in the formula) or is it the total C%? It looks to me that the second is the case, but I’m not following why in your first example you subtracted the C% (.62) from 1, then added that back onto 1 to get 1.38.
i use the distance between macd and signal line… its just used in the formula and not used to trade so i dont need it to be on the chart.
If it’s built into your custom indicator, how are the TP and SL figured?
i dont use the signal line to figure my sl tp i enter/exit based on %'s
but for beginners to the system I say to use the point at which atr and clevel% meet and skew that by their RISK level or RII +RF= RP RISK PREMIUM
Is the histogram that’s displayed showing the MACD (to use in the formula) or is it the total C%? It looks to me that the second is the case,
yes its the histogram of c%
but I’m not following why in your first example you subtracted the C% (.62) from 1, then added that back onto 1 to get 1.38.
well is .62 is the part of the cycle that is used this depends on that chart currency pair you look at … they all have there own statistical probabilities for movement. ( ill explain this when i get to the more intermediate section of my posts) so youve used .62 of one cycle thus .38 remains to account for that .38 you add 1 so 1.38 becomes the cycle coefficient of the remaining movement to what would be as it relates to the specific pair.(also more advanced post coming)
OK…it’s getting a little clearer. I appreciate your willingness to share this and answer questions. I like how much time and effort you’ve placed into making this as profitable as possible. I just want to make sure I understand everything clearly.
Please tell me how you got your numbers in the second example (EUR/USD).
I assume this is when the MACD Crossover went below 0 (11-07-2008 at 16:30 on my chart). The ATR was showing a value of .0045 (45) My chart, granted now in retrospect, shows CLEVEL=-0.0044527.
So where does this .5% come from? (rounded CLEVEL*100?) Because later,
My CLEVEL shows -0.02288, so that would only be 2.28% rather than 3% (assuming I’m following all this).
I’ll have to wait for more posts to figure out SL and TP.
Please tell me how you got your numbers in the second example (EUR/USD).
I assume this is when the MACD Crossover went below 0 (11-07-2008 at 16:30 on my chart). The ATR was showing a value of .0045 (45) My chart, granted now in retrospect, shows CLEVEL=-0.0044527.
So where does this .5% come from? (rounded CLEVEL*100?) Because later,
yes clevel*100
the numbers depend on the macd parameters you use what where you using?
each pair has to be adjusted and by time period because time period used will change numbers on macd and signal but price remains the same so itll affect clevel and youll be looking at different powers of moves. a signal given by 12/26/9 will be shorter of a move because vrs price it hit .5 to 3 faster then 34/77/25 because of the way it scales.
odds are tho i called .45 = .5 cause its only .05% off which isnt much and 2.28 to you on my chart i must have been using a different set or forgot to change it cause i read 2.88 which essentially means look for exit near 3% technically you should be looking for a good exit point from the 2 tho. because odds are your gonna see a counter move before it resumes back to the direction and move to 3% this is why you see me talking to gobbler i have two of them up at different time periods. one is a main trend the other is a sub trend all in the same time frame.(next few posts will explain this) but for the most part 2.88 i believe is what i saw and i rounded to 3 and exited. the numbers dont have to be sold .5 to 3.
My CLEVEL shows -0.02288, so that would only be 2.28% rather than 3% (assuming I’m following all this).
your following… prolly just a indicator setting just remember that when you go to scale for a specific pair youll need to set the indicator in the same proportion as 12/26/9 to where the top extreme read 5 and the bottom reads 5 or at least around that that way youll catch exactly the .5 to 3 movement and dont have to worry about sub trends.
eventually tho youll want to cause theres bigger movements to be made down the road this is were experience in the system takes you from a 30 pip movement from .5 to 3% to a 100 pip movement with larger indicator setting with a 2nd subtrend indicator at 1/2 value or 3 at 1, 2/3, and 1/2 value(this is more advanced for the system tho ill explain this more in next few posts)
this is good tho your helping me structure my next few posts with you questions
I’ll have to wait for more posts to figure out SL and TP.
[/quote] ill include a section on this to clear it up.
highest Prob combination is
34,77,26 MACD C%
EMA(20)
TURN ON ATR 14
so here is my chart. Im seriously looking at this system and its starting to make sense but I am only begining to grasp it. The levels you set as the highest probabiltiy combination, is that for a H1 period or H4 you said that the macd levels would have to be adjusted accordingly?
Im definatly not a coder and so im proud of myself I was able to compile your indicator Truthfully I almost never use indicators at all but I am attracted to the 96% win prospect and I would like to deversify my trading.
Thank you by the way I greatly appreciate all your effort and dilligence to test for hundreds of hours and to share with us your time even more.
What are the 3 levels on your indicator? are they the accual level of significant crossing? ( I know dumb question right) Coz when you refer to the .5 -3% range is it these numbers you are refering to?
Finally It would help me if you could break down your t/p and s/l a little more because im not fully grasping it.
The levels would have to be adjusted for beginners so that they get the normal .5 -3 movement captured within so many std of price action as it moves away from its base.
-i dont really look at the numbers anymore just how they move and i look where the base is and i look at multiple fluctuations at different periods.
ill explain more in a bit
Im definatly not a coder and so im proud of myself I was able to compile your indicator Truthfully I almost never use indicators at all but I am attracted to the 96% win prospect and I would like to deversify my trading.
thanks im glad you took time to check it out actually posted all this online because i needed to organize myself and get reactions from the community as ill probably write a book on my elastic market theory. when i get into more advanced areas you can see that in different stages you can almost predict price action with this indicator without having to even change time frames.
Thank you by the way I greatly appreciate all your effort and dilligence to test for hundreds of hours and to share with us your time even more.
your welcome ive been workin on this reading reading reading for prob 7+ years on this stuff since i was in High school my family owns a small investment brokerage firm so ive had all sorts or tools and articles and free programs at my arsenal. the craziest thing is when you go back tho and read the books of the people who created the markets you know dow theory and all that crap… they are really brilliant…tho dow died without finishing his work is thoughts in his literature is still worth reading and applying because even now some of his ideas are ahead of our time…
What are the 3 levels on your indicator? are they the accual level of significant crossing? ( I know dumb question right) Coz when you refer to the .5 -3% range is it these numbers you are refering to?
hum tough question, well all levels of periods in the indicator is levels of sig crossing in relation to price action. when i refer to .5 - 3 what i mean is in a period in the indicator thats set so the top of the indicator reads 5 to -5 or around that then trading from the .5 to 3 will be accurate to 96% of the time
setting it so that it reads the more extremes in the period such as from 7 to -7 the .5- 3 will improve in accuracy while as setting it as 3 to -3 will result in a loss of accuracy but will capture a sig. amount of more trades… i will go on to discuss how this relates to Overtrading and the skewing of probabilites and how it places strain on an account and can literally bankrupt a trader.
Finally It would help me if you could break down your t/p and s/l a little more because im not fully grasping it.
setting up for trading our system setup
everything you need
the basic macd Clevel% formula
how its used to open and close a basic macdC% trade
next posts will be about
money management - seems like theres alot of questions about this
then
well link all the basics together with the post skewing probabilities
//±-----------------------------------------------------------------+
//| MACD CROSSING LEVEL.mq4 |
//| Chris E |
//| |
//±-----------------------------------------------------------------+ #property copyright “chris also known as pip god” #property link “your mom”
#property indicator_separate_window #property indicator_buffers 3 #property indicator_color1 Red #property indicator_color2 Silver #property indicator_color3 Yellow #property indicator_width1 2 #property indicator_width2 2 #property indicator_width3 2
//---- input parameters
extern int FastEMA=12;
extern int SlowEMA=26;
extern int SignalSMA=9;
extern int Clevel;
//---- buffers
double MacdBuffer[];
double SignalBuffer[];
double ClevelBuffer[];
double RClevelBuffer[];
//±-----------------------------------------------------------------+
//| Custom indicator initialization function |
//±-----------------------------------------------------------------+
int init()
{
//---- drawing settings
SetIndexStyle(0,DRAW_NONE);
SetIndexStyle(1,DRAW_NONE);
SetIndexStyle(2,DRAW_HISTOGRAM);
SetIndexDrawBegin(1,SignalSMA);
IndicatorDigits(Digits+3);
//---- indicate buffers mapping
SetIndexBuffer(0,MacdBuffer);
SetIndexBuffer(1,SignalBuffer);
SetIndexBuffer(2,ClevelBuffer);
SetIndexBuffer(3,RClevelBuffer);
//---- name for datawindow and indicator subwindow label
IndicatorShortName(“MACD CROSSING LEVEL V1.0”);
SetIndexLabel(0,“MACD”);
SetIndexLabel(1,“Signal”);
SetIndexLabel(2,“CLevel”);
//---- initialization done
return(0);
}
//----- No Defining Functions
//±-----------------------------------------------------------------+
//| Custom indicator iteration function |
//±-----------------------------------------------------------------+
int start()
{
int limit;
int counted_bars=IndicatorCounted();
//----recounting last counted bar
if(counted_bars>0) counted_bars–;
limit=Bars-counted_bars;
//----Count MACD in first buffer
for(int i=0; i<limit; i++)
MacdBuffer[i]=iMA(NULL,0,FastEMA,0,MODE_EMA,PRICE_CLOSE,i)-iMA(NULL,0,SlowEMA,0,MODE_EMA,PRICE_CLOSE,i);
//----signal
for(i=0; i<limit; i++)
SignalBuffer[i]=iMAOnArray(MacdBuffer,Bars,SignalSMA,0,MODE_SMA,i );
//---- counting Clevel in 3rd Buffer
for(i=0; i<limit; i++)
ClevelBuffer[i]=100*((MacdBuffer[i]-SignalBuffer[i])/(PRICE_OPEN));
return(0);
}
//±-----------------------------------------------------------------+
copy this and paste it into metaeditor than you can compile it
Truthfully I almost never use indicators at all but I am attracted to the 96% win prospect and I would like to deversify my trading.