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Greetings Richard,
I'm not much for trading crossovers, but a couple of things do come to
mind. I use the MACD "histogram" based on Alex. Elder's "Trading for a
Living." (The formula is available at the Equis homepage, I think.) The
direction of a 13 week MACD works as a trend-following indicator, or
trend-confirming indicator - which in turn can help keep you out of
whipsaws on the daily charts. The book is well worth reading, and Elder
has quite a bit to say about MACD. In general, Elder maintains that
looking for trends on the weeklies is a viable method of gaining some
perspective on the daily picture.
But perhaps the most informative aspect of the MACD (histogram) are its
divergences. In my (limited) experience these are strong signals. Try
dropping your MACD on an historical price plot (weekly or daily) and
just looking at the divergences. I think you'll be surprised . . . and
quite pleasantly so!
Best regards,
Philip
Richard C. Fredette wrote:
>
> Has anyone had good results from trading with a system based primarily on
> MACD? It can keep you in the trends pretty well, but there can be
> substantial whipsawing if followed rigidly. Any hints for using it and
> avoiding the whipsaws? What parameters are best for trading mutual funds?
> Are trading crossovers with the Zero line preferable to trading
> crossovers with the trigger line or is there a time for both? When do you
> use daily vs hourly charts(using delayed feed)? Any other indicators to
> use in conjunction? Aside from trendlines(Raff or otherwise), which are
> always useful, is there a better way to go?
>
> DickRichard C. Fredette wrote:
>
> Has anyone had good results from trading with a system based primarily on
> MACD? It can keep you in the trends pretty well, but there can be
> substantial whipsawing if followed rigidly. Any hints for using it and
> avoiding the whipsaws? What parameters are best for trading mutual funds?
> Are trading crossovers with the Zero line preferable to trading
> crossovers with the trigger line or is there a time for both? When do you
> use daily vs hourly charts(using delayed feed)? Any other indicators to
> use in conjunction? Aside from trendlines(Raff or otherwise), which are
> always useful, is there a better way to go?
>
> Dick
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