Well again I have tweaked the method. So here is my latest edition.
MACD 12, 26, 9.
EMAs 50 and 100.
Moving Average of Oscillator (OsMA)
I will trade mostly EURUSD, GBPUSD, AUDUSD, USDCHF, USDCAD.
Many of you know my thread “trading using MACD and Bollinger Bands” in the trading discussion area. This method is derived from my experience trading the MACD and some of my trades are documented there. The purpose of that thread was to develop a method of trading using MACDs as a signal so when you read that thread you will notice that the method evolved. Now I believe I have a method that works for me. So here we go.
The initial set-up occurs with a 50/100 EMA cross. After the cross you wait for the MACD to cross the zero line in the opposite direction of the EMA cross. Now wait for the MACD to come back and cross in the direction of the EMA cross. Now a little discretion occurs with the actual entry. I look to the left and study the swing that corresponded with the MACD dip or spike. I identify a significant area of support or resistance that needs to be exceeded to trigger a pending order. If that sounds confusing I hope to clarify with some chart examples.
Now you are wondering what the moving average of oscillator is for? This indicator is not essential to the method but it is more reactive than the MACD so it will often give earlier signals than the MACD. The downside is that with more signals many will be false so beware.
I do not use the colored MACD any more as it gave too many false signals. It does not matter if the MACD is set to 12, 26, 9 or 12, 26, 1.
I will post a chart or two to follow.