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Re: System



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Moshe,

A few questions and comments:

1. What does MACD(14) mean? MACD requires two parameters, the time lengths 
of the short-term and long-term moving averages.

2. The system you describe is similar to the standard interpretation of the 
MACD indicator for long positions. However, if you wait until the MACD 
crosses its moving average AND MACD>0, you may miss the whole move. The 
MACD might cross its average before it crosses zero. I'd suggest you look 
at buying when MACD is above both zero and its moving average.

3. Some recommend that you buy when the MACD crosses its moving average, 
regardless of which side of zero it on. This is a more aggressive approach. 
I prefer to wait until MACD is positive or at least there is a clear 
indication that the price is moving up.

4. The MACD method should work for all trending markets. However, you are 
likely to get whipsawed when the market is locked into a trading range.

5. You didn't say anything about going short. Do you only trade the long 
side of the market?


Hope you find this useful.

Tom


At 12:04 PM 4/3/2000 +0200, you wrote:
>Hi Listers,
>
>I am newbie and I know that but I tested on paper the following system for
>the DIJA:
>
>Buy on MACD (14) cross over with Moving Average (9) but only when MACD > 0
>Confirmation by Moving Averages 13/50/200 on Index chart
>
>Sell on MACD cross below MA OR MACD going under 0
>Confirmation on correct RSI (20) trend
>
>It seems to catch the big movements. Any comments will be appreciated.
>
>Moshe Shalom
>Israel
>





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