Edited after publication - bold text on VP quotation
Hi,
This thread is very valuable to me. You took the time to read it and respond with criticism. I never take that negatively, so thank you. It is only when people with some knowledge disagree that a deeper level of understanding can be achieved.
What interested me about VP in the beginning is his attitude and approach. As I say, I have watched about 100 of his videos or podcasts (and have about another 60 to go). Like many who stumble across his ranting (teaching), I happened to start (if I am not mistaken) with the video about Big Banks. I knew about manipulation way back - I am a gold bug! But it seemed to me that VP was about to use that knowledge to form a strategy that could largely mitigate that fact to the trader’s advantage, so I paid attention.
I have two criticisms of the VP method. But these criticisms are also the reason I chose to spend countless tens of hours ensuring that I understood all of what I was supposed to understand from his work.
Criticism #1. His material is wholly unstructured, but when you come to his website and see the chronology of the material presented, I am not sure that makes sense either. So after about 20 videos, I decided to map out his podcasts and videos into a semblance of order. For simplicity, after some false starts, I decided just to watch them all in the order in which he created them.
Criticism #2. He can come across as somewhat condescending. I know from my own past work that this is sometimes how I appear to others when it comes to a subject for which I have great passion. I do not see this style myself when I am writing the text, but it’s good from time to time when others point that out to me. I try to keep emotional words out of my posts. Upon reflection, I can see why my opening line of “It doesn’t matter to me whether he (or I or anyone else) knows how to use the MACD.” could be seen as combative or condescending. It was not meant that way, so my apology if it came across that way. I am fully supportive of your response, and hope that members get a good deal of lessons from this discourse. Only by questioning what is written by others do we all move forward, even if at the time we do not see what the others are trying to point out.
On to the main point “how did it fit the context of this thread?”
When I do not understand what VP has said, I make a note in my “Terms of Reference” or ToR document that, when completed, will form my Forex Trading Strategy and Plan. As a person with a project management background, I can’t function without putting stuff in boxes and drawing the inter-relationship between the boxes. First I have a section that lists the titles of all his videos, podcasts or other material. All the links to those titles are recorded. For each title subject, I take summary notes after listening or watching. I also take note of when he refers to other publications of his (cross-referencing for deeper meaning). I now have a document (incomplete) that extends to 35,000 words. Often when I read a post on Babypips, I type in a few key words into my ToR and 90% of the time I am taken to one to five instances of that keyword in my ToR. From there I can simply refer to the link to the VP production, and watch it again - or parts of it, to consolidate my own belief that I can then use (hopefully) to provide some content to other forum members.
With specific regard to MACD, I used it a lot, and was dismissive of his dismissal of it as a tool. The bad thing (and at the same time the value) of the VP method is that it causes you to question WHY he is teaching what he is teaching.
That is a reason your response is valuable to me. I now have to go back over his content and answer your question. I do this to remind myself that I will not succeed in Forex unless I perpetually maintain initiative, discipline and patience.
This is what VP says in that MACD podcast.
For Longs
Make sure both lines are above the zero line, and have never gone below it since it last crossed itself.
Then, if they cross upward, go long.
For Shorts
Just do the opposite. Make sure the lines are below zero and wait for them to cross downward.
This Has Been A Gigantic Tip (Did You Catch It?)
I call these continuation trades, and you will hear me refer to them a lot in the future.
They are responsible for the biggest trades I have made in my career. Without them, I would have probably half the success I have now.
By itself, it may not have much meaning. But the method of delivery that VP has chosen is to take the reader slowly through a set of six major decisions that eventually form the basis for a complete plan that not only can be shown to be net positive in outcome (backtesting the strategy), but can be continuously improved upon or to be chosen ONLY in certain markets (long, short, choppy). It is this last piece that particularly fascinates me. I do not believe there is a strategy or plan that works in all markets. But that is by the by.
In context of all his other publications, the extract I have put in bold italics above is the most fundamental principle on which I have set my strategy for defining the zone. That means price action is moving in a way that may indicate a profitable entry. I then combine that with (edited) one indicator to determine the money at risk for the trade (the stop loss definition) and use two other indicators to know if and when to enter. The others of the six are about trade management and trade exit.
I hope this has fully answered your question, and thanks for taking the time to read my post. Having again reviewed my own ToR, that has helped me to consolidate that this is indeed a good use of the MACD indicator. This is also in the context that my strategy is in trend following not trend reversal.
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