OK the set up is now in place so we are looking for a break of the last candle high
Last candle high should have been 1.4202, but you entered @ 1.4166. What am I missing here?
TimeFreedom
The entry is marked. For a long if the candle is not broken to the upside you move the entry down and this might go on for several candles giving you a better entry
1 Like
I appreciate the quick response. OK, I understand now. Obviously I missed the price break of the last candle high. Can I still get in now or wait for a retracement back to the last candle high?
TimeFreedom
I would wait now and see if you get a chance on a retracement
Though I am not an indicator man, I do have Gerald Appel’s book…“Technical Analysis” in which he derives the MACD and fully explains every facet of its use.
I have done a lot of research on the MACD and use the MACD in my sharetrading and with 9/40/100 but that is only in the 1 min time frame and then only as a guide.
The MACD is notoriously prone to whipsaws and even with solid confirmation, can abruptly turn around and throw you out.
I feel that your risk/reward ratio may be a bit too greedy. Try altering the stop loss to 100 pips and the reward to 200 giving 2/1.
A backtest with this risk/reward would be interesting.
Also, what would you do if you turned on your computer and the latest data on your screen showed you in between the two crosses?
You would see the new cross coming and say “ah ha, a trade coming” but you have no idea that there has previously been a cross in the other direction - the one you [U]should [/U]have taken!
True, you can scroll back, but with those large MACD values, could you not miss the previous cross?
As entries are taken on the candle close you cant be in between as it were although you can certainly on rare occasions get sequential signals in opposite directions. I have tried other RR ratios the second best being 60/180. As always there is a risk of overoptimising and as it stands it hasnt had a losing year under test so we will see. Thanks for the thoughts
Just a reminder that the stop is now at break even on this trade. Looking good but a long way to go yet
This would normally signify a short trade but is ignored since we are in long. If we were already in short we would add a position at this point
Tony,
Just wondering if you are still trading the MACD Contrarian strategy? I like the simplicity of your strategy and it’s long-term outlook. You should have already closed out +250 pips and we now stand aside and wait for MACD to go below 0 for the next long entry? Is this the status?
TimeFreedom
Yes I trade a portion of my funds with this model. You are exactly right we have closed out and await the next signal
This is the updated spreadsheet showing a 21% return so far
Tony,
I appreciate your feedback. I noticed most of your short trades were stopped out on the spreadsheet. Have you thought of only taking trades based on the long-term direction of E/U, which has been Long for some time now?
TimeFreedom
No I havent looked at that although its worth exploring. On the current years trades though if you took long only you would be at 2-2 which is an inferior return. The 2 winning short trades at 4R make a big difference to overall returns
tonymand,
Looks like we left a lot of money on the table by getting out @ +250?
TimeFreedom
Yes, dont you just hate that. However there will be occasions when it just gets to target then turns around. I think if you were intent on trading this amazing weakening of the dollar you would use other methods, just get in on the dips an ride it up. Are you still in this? If so good onyer
tonymand,
I closed my E/U with +250 and sit and wait for a correction/retracement based on MACD Contrarian. I agree that we should take advantage of the weak $ and buy on dips.
TimeFreedom
Yes, lots of methods for doing that on the forum. At the moment using trending techniques for EUR, CAD and AUS in particular looks to be good value
