Hello again.
i am putting together my trading plan and i am now at the TRADE SETUP section. I like the Holy grail by linda rashke. Could someone advice me on what indicators i can use with this. I was wondering if i can use the MACD.
any thoughts greatly appreciated.
J
There is no Holy Grail in Forex! By the way, are you talking about default MACD indicator or anything else?
So do I, because it’s based on a logical and sound principle of market movements.
But that doesn’t mean that Linda Bradford Raschke’s “grail entries” methods will have an edge for you in the spot forex markets, and they’re really very unlikely to, for a wide range of reasons which (no offense) you don’t have enough experience to understand.
Taking something from a very old book (however many websites it’s subsequently been published on) and thinking something like “I like the look of this - I’ll use it as my trade setups method” is not a good recipe. To put it mildly.
I appreciate and understand your desire to “find something quickly” and “get trading quickly”, but at the very minimum you need to select an instrument and a timeframe and then backtest a decade’s appropriate data with those “grail entries” first.
When you do, a quick change of mind will follow!
Also, you need a fundamentally different approach from looking at published methods and wondering what indicator you can add to them either to make them work or to make them work better.
That isn’t how trading works.
Including an additional indicator with something isn’t generally a way of making it more profitable.
It’s sometimes a way of reducing the trading frequency, and it’s sometimes even a way of increasing the win rate as well, but even on the occasions that it’s both of those things, it still doesn’t follow that doing that makes it more profitable. It might make it less profitable, overall. You need to know these things, and to test and prove them, ensuring that the edge has actually been increased, before you even think about trading them.
You also need a reason for testing stuff, though - there’s no point in thinking “the XYZ looks like a nice indicator: I’ll add that to it and see if it improves it”. The chances of that working out for you are terribly tiny, for several different reasons.
You need to approach it the other way round. Identify the method’s weakness first, and then start thinking about ways to try to counter it. Again, this needs quite a lot of practice and experience and understanding, before you’re going to have even a chance of doing it successfully.
Again, no offense, but you’d be much better off getting your early experience and practice by looking at something much simpler, and gradually developing the discipline necessary to trading it, understanding how it purports to work, and learning to analyze it for yourself.
If you really want to have a good look at Raschke’s “grail system”, which I don’t recommend, personally I’d suggest varying the way she uses the ADX (because you might find that whether its rising or falling, and the relative directions of the +DI and -DI lines is actually much more helpful than the absolute level of the ADX).