# MACD Crossover Sell Signal



## Funda-Struck (28 July 2015)

Hey ASF'ers,

I am considering implementing a sell signal in my trading plan, to sell when the MACD crosses below the signal line.
I believe I may be thrown out too often with this rule however?
Is there a good volume indicator I can implement with this rule, that will help me disregard the macd crossover below the signal line IF the pullback is on low volume?

I would love to test this out in real time, however my first filter is to stay out of the market when XJO is trading below 50 SMA...Yawn!


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## pixel (28 July 2015)

Funda-Struck said:


> Hey ASF'ers,
> 
> I am considering implementing a sell signal in my trading plan, to sell when the MACD crosses below the signal line.
> I believe I may be thrown out too often with this rule however?
> ...




I found the same problem - especially with the parameters: 26, 12, 9 commonly found in literature.
So, I analysed what those MACD lines and bars really mean.
Without going into tedious details, I found the shorter the short period, the better the profits.
3, 13, 7 (more recently replaced by 8) gave me satisfactory results. (Should you want to dig into those "tedious details", check http://rettmer.com.au/TrinityHome/Trinity/MACD slides.pps )

Subsequently, I have come across studies that confirm my general idea; one author is going even a step further, favouring the price itself instead of a 2- or 3-day EMA.
See http://etfhq.com/blog/2013/02/26/macd-test-results/

In my approach, volume plays a subordinate role, although I tend to dismiss stocks that are too thinly traded. I rarely want to lead the market, but prefer to hide among the market movers' trades. In Dollar terms, that means the average daily turnover should be at least ten times my own position size - preferably much higher.


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## Funda-Struck (28 July 2015)

Wow that was deep. Especially for a beginner like me, lol.
I had a play around today and have implemented a cross over the signal line as a sell signal in my plan; but only in the first stage of the trade before break even has been locked in to cut the losses (although by this stage I may have already exited if the price hasn't moved as I anticipated). 
After breakeven has been locked in, I think I will disregard the crossover signal to attempt to ride more of the trend.
I am also going to avoid illiquid stocks, I have put in a filter to avoid stocks that don't average at least $100,000 daily.
I'm still going through the "beginners cycle" of constantly changing my plan, but i'm getting closer!


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## choniev5 (15 August 2015)

A good indicator would be to understand how MACD works. Try looking for a shorter short-term moving average (12-day) and a longer long-term moving average (26-day). A shorter short-term moving average means good profits. If the MACD line is above signal line, the histogram in the chart is positive, but if it’s below the signal line, it’s negative.


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## AverageJoe (15 August 2015)

I think people should understand how MACD is actually calculated. In the standard 12,26,9 parameter, If I still remember the actual calculation the signal line is the moving average(9) of the spread of the difference between the MA(12) ans MA(26). So the average of that spread determines effectively or the leading signal before you see the MA(12) cross over the MA(26) on a standard 2 MA crossover. Just a more sophisticated MA crossover so there are lagging factors involved to confirm the reversal on the price it is measuring.

If you use a shorter MA parameters in any of the 3 that is fed into the calculation, you run the risk of getting too many false signals. If you use a longer periods of measurement, then the entry signal will be very late. No free lunch. The problem with this indicator is that when you get a buy or sell signal, you are never quite sure if that is the start of the trend or price is just whipsawing and you get many losses as you see buy and sell signals constantly. MACD works effectively only in a trend. 

Some will use a combination of MACD with for instance RSI, an oscillator that works well in a ranging price and use a combination to get confirmation. When the trend ensue, RSI will constantly be in over bought/sold which is what you expect so that is the weakness of RSI. Some use this OB/OS to confirm with MACD as a trend sustain. 

Personally I have tried these indicators for a long time and it causes more confusion than anything else and works well in hindsight. I don't use any indicators now.


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## tech/a (15 August 2015)

An average crossover particularly a shorter timeframe will see lots of whipsaws
I think the idea of leaving oscillators out of discretionary trading decisions is
Wise. Price and volume action can give an early indication of where price will
Stall and sometimes where it is likely to reverse.


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## Funda-Struck (16 August 2015)

I have come to the decision to completely remove the MACD crossover sell signal from my trading plan... Simply wasn't working for  me. In my sim-trading I have just exited 6 losers in a row due to a negative crossover the signal line before I could lock in a B/E stop.
I'm aiming for at least a 50% win rate, so 6 losers in a row is not a good start (even though the main reason for the stops being triggered was because of a volatile earnings week!)
I reckon when I've finally got my plan sorted,   I'll add an extra rule to close the market during earnings season!!


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## Firefly_au (17 August 2015)

I have found that the data used for any TA indicator is usually the ultimate source of trading failures intra-day. 

Unless the indicator data source is "real time" and non-smoothed they basically often fail. Most multi-day daily charts have the true range of price variance averaged out which often causes the preset values set for stops and profit targets to be set incorrectly. Even when we perceive the multi-day SP trend correctly it often moves counter to the trend enough to hit stop loss triggers, often in the first 10minutes of the day's trading, and just before the SP goes as we predicted for the day.

Unless we pay for timely data, trading well with indicators such as MACD, SMA and RSI is very difficult to do profitably imo.

While I find indicators useful to judge the expected trend I don't find them particularly useful as actual buy or sell signals because they basically accurately tell us the past SP action not the future. Unless we use them to set positions based on probabilities with predetermined stops and targets, they are fairly useless imo... 

If trading shares was easy we would all be instant millionaires


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## tech/a (17 August 2015)

Firefly_au said:


> I have found that the data used for any TA indicator is usually the ultimate source of trading failures intra-day.
> Unless the indicator data source is "real time" and non-smoothed they basically often fail. Most multi-day daily charts have the true range of price variance averaged out which often causes the preset values set for stops and profit targets to be set incorrectly. Even when we perceive the multi-day SP trend correctly it often moves counter to the trend enough to hit stop loss triggers, often in the first 10minutes of the day's trading, and just before the SP goes as we predicted for the day.
> 
> Unless we pay for timely data, trading well with indicators such as MACD, SMA and RSI is very difficult to do profitably imo.
> ...




What is this babble?


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## shulink (17 August 2015)

There are many false alert when use MACD crossdown alone. I usually combine it with Candlestick patterns, volume as well as support and resistance, and they work pretty well for me.


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## AverageJoe (17 August 2015)

tech/a said:


> What is this babble?




Not sure too, didn't understand the part about "realtime data" as opposed to using the closing day data. Any moving average derived indicator will always give a later signal. You 'pay' for that confirmation. However if you catch a particularly strong trend, its strength lies in the way it allows you to ride the trend a lot longer.


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## Joules MM1 (17 August 2015)

you had me at



Firefly_au said:


> Most multi-day daily charts have the true range of price variance averaged out which often causes the preset values set for stops and profit targets to be set incorrectly......


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## Joules MM1 (17 August 2015)

AverageJoe said:


> Not sure too, didn't understand the part about "realtime data" as opposed to using the closing day data. Any moving average derived indicator will always give a later signal. You 'pay' for that confirmation. However if you catch a particularly strong trend, its strength lies in the way it allows you to ride the trend a lot longer.




this is an aggressive view

for a balanced view, maybe, you could put up a picture showing that "pay" going in and the "pay" of getting out and the "pay" of being forced out too early, how to know when that's happening, how to ignore the signal, how to know the signal is valid enough to reverse your position ...afterall, even tho there isnt a mirror, there as cost to getting out based on the signal 

a ring thru the nose leading the trader around...with a long rope..stick n carrot ?

must be lunch time at honkers island


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## Boggo (17 August 2015)

Using indicators on their own is a bit of a "which came first, the chicken or the egg" process imo.

I have used indicators in Metastock mainly to remove the small whipsaws etc. At the moment I am in the process of transferring and re-writing my scans and explorations to Amibroker.

I still have a bit of tuning to do on the rewrite of my weekly scan but one indicator I have included is the Siroc.
All that it does is disable any random signals while the Siroc is in a "negative" or downward direction with the associated negative crossover. This reduces the number of trades and increases the reliability of the signals that do appear with a resulting overall better outcome with less trades.

To me anyway this is where the use of a simple indicator is a potential advantage an it is possible to use the MACD in a similiar way.

Just my 

Two examples below, top half of each pic is without the Siroc, middle is with the Siroc enabled and bottom is the Siroc. (click to expand).


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## Firefly_au (17 August 2015)

AverageJoe said:


> Not sure too, didn't understand the part about "realtime data" as opposed to using the closing day data. Any moving average derived indicator will always give a later signal. You 'pay' for that confirmation. However if you catch a particularly strong trend, its strength lies in the way it allows you to ride the trend a lot longer.




Happy to try to clarify it for you 

"Realtime data"  refers to the fact a many retail trader data sources are delayed sometimes upto 20minutes. Unless fees are paid to get more timely data often price action is all over before it shows up on retailer charts. Basically what this means is many retail traders are operating with an inbuilt disadvantage greater than most, in a market that allows HFT and bots.

Most daily charts use the closing price data which often does not reflect real-time price action intra-day particularly well imo. This effect can be seen quite readily when the hi and lo SP data is also available for analysis. As far as I am aware most multi-day indicators use the daily chart data with this limitation on accuracy. Hence combined with other mathematical averaging that occurs the signals can be delayed to the point of being nearly useless as an actionable buy or sell signal, because they often occur after the price action has occurred. They often only help marginally to preset the Buy and selling triggers on our trading platform unless the SP trend is sustained.

At least that has been my experience.


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## AverageJoe (17 August 2015)

Firefly_au said:


> Happy to try to clarify it for you
> 
> "Realtime data"  refers to the fact a many retail trader data sources are delayed sometimes upto 20minutes. Unless fees are paid to get more timely data often price action is all over before it shows up on retailer charts. Basically what this means is many retail traders are operating with an inbuilt disadvantage greater than most, in a market that allows HFT and bots.
> 
> ...




I still do not understand how the data will impact the investor looking at the daily chart? Unless you are referring to intra-day signals?


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## AverageJoe (17 August 2015)

Joules MM1 said:


> this is an aggressive view
> 
> for a balanced view, maybe, you could put up a picture showing that "pay" going in and the "pay" of getting out and the "pay" of being forced out too early, how to know when that's happening, how to ignore the signal, how to know the signal is valid enough to reverse your position ...afterall, even tho there isnt a mirror, there as cost to getting out based on the signal
> 
> ...




I am just saying there is no free lunch, I did not say MACD is incapable of providing the signals. "Pay" refers to how MACD is derived with 2 moving averages. The signal is obviously more sophisticated than looking at a crossover but whatever the maths is used to derived the signal, the is lagging. I am sure you already know all this.

Regarding "*how to know when that's happening, how to ignore the signal, how to know the signal is valid enough to reverse your position*", hindsight is the best tool. 

I have not used MACD for a long time now but if you can't see what I am referring then pull up a chart or alternately use 2 MA cross over. I just use the humble S/R, simple PA on candlesticks and RR. Nothing magic about it.


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## Joules MM1 (17 August 2015)

AverageJoe said:


> hindsight is the best tool.




prob a lot more hindsight than foresight with laggards .....true that with a lack of knowledge a trading plan can be made based on these indicia, i've done such a thing, suffice to say the reason is because the more I ask "what if this..?" then the closer i am drawn to price as most traders eventually do....afterall, if everything starts with the price, it ends with price too ....everything else surrounding price is an add-on based on lack of knowledge or lack of data or both and that's not a judgement so much a recognition of which part of the journey a trader is on
the difference is in the time taken to make a decision, enact the decision and then have the courage to retract the decision.....I'm saying the closer that price is transacted at the price and not at the laggard the more likely the trader is to gain courage (eventually called experience) and take the next step to being an effective trader

the bottom line aside from the monetary risk is the large amount of time involved


thanks, AJ 

edit .....this is where the utter bollox of discipline comes in.........the distraction..we used to see this stuff all the time.....traders going on a rant about losing discipline......still comes down to lack of knowledge or lack of data....still comes down to intelligent and cognitive logic mixed with courage based-on .....if you have good data youre likely to have "better" courage even if is a little dutchy but if youre drawn out on time with an one-hit-wonder indicator action AND have to have discipline based on a laggard that can have several interpretations then the stuff is stacked against you........


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## Firefly_au (17 August 2015)

AverageJoe said:


> I still do not understand how the data will impact the investor looking at the daily chart? Unless you are referring to intra-day signals?




I suppose that is the problem... I am really referring to both because most of my successful ST trades where over several days but the intra-day price action has a larger effect short term. Its a disconnect that became more pronounced while trying to predict future price action using TA indicators derived from delayed and averaged daily data.

Often it can trigger preset buy or sell without the SP trend on the daily charts with their averaged plots of the closing price showing why it happened. Regardless of the chart inaccuracy due to averaging and delay our trades and triggers are based on real-time price action unless our trading platform or broker is also running on delayed data......which is highly unlikely imo.

My experience has been that this occurs with all TA indicators MACD included and it makes them less useful than they should have been in popular theory.

Has anyone here actually used them as preset triggers and made money that way?


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## tech/a (17 August 2015)

Why on earth would you trade intraday without R/T data feed.
Why on earth would you use oscillators to trade intraday!

Why would you trade Aussi stock intraday!

If you can't afford a live feed you shouldn't be trading.


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## Boggo (17 August 2015)

Firefly_au said:


> .
> 
> Often it can trigger preset buy or sell without the SP trend on the daily charts with their averaged plots of the closing price showing why it happened. Regardless of the chart inaccuracy due to averaging and delay our trades and triggers are based on real-time price action unless our trading platform or broker is also running on delayed data......which is highly unlikely imo.
> 
> My experience has been that this occurs with all TA indicators MACD included and it makes them less useful than they should have been in popular theory.




Mate, can you post up a chart of what you are saying. To me at the moment it seems that you are blaming indicator inaccuracy because of delayed data - mixing apples and oranges there.
The indicator doesn't know that it is delayed data, it simply responds to the data that it gets.

Also, an indicator set of parameters that are optimised for weekly data wont work accurately on daily or hourly data, each timeframe is different and requires a different approach (or indicators).

Indicators are only that, an indication of what has occurred but can be used to assist in recognising a potential pattern developement - totally useless for trading with as a stand alone buy sell system.


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## Firefly_au (17 August 2015)

tech/a said:


> Why on earth would you trade intraday without R/T data feed.
> Why on earth would you use oscillators to trade intraday!
> 
> Why would you trade Aussi stock intraday!
> ...




Yes I agree, how ever I suspect many interested in shares, trade initially via a superannuation platforms which most seem to rely on delayed data. Most indicators can be set with setting marginally useful for intra day trades and they can still be used to form a picture about the likely course of trade.


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## tech/a (17 August 2015)

Firefly_au said:


> Yes I agree, how ever I suspect many interested in shares, trade initially via a superannuation platforms which most seem to rely on delayed data. Most indicators can be set with setting marginally useful for intra day trades and they can still be used to form a picture about the likely course of trade.




Those with Super would be trading anything BUT intraday.
Unless you are using an oscillator based system I personally find
the information found in oscillators of little use, perhaps with the 
exception of divergence. Some volume indicators and ATR.

But I have seen some excellent systems based around Oscillators.
A totally different topic.


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## Firefly_au (17 August 2015)

Boggo said:


> Mate, can you post up a chart of what you are saying. To me at the moment it seems that you are blaming indicator inaccuracy because of delayed data - mixing apples and oranges there.
> The indicator doesn't know that it is delayed data, it simply responds to the data that it gets.
> 
> Also, an indicator set of parameters that are optimised for weekly data wont work accurately on daily or hourly data, each timeframe is different and requires a different approach (or indicators).
> ...




I haven't thought about collecting charts to demonstrate this effect well, so sorry I can't show you with charts just now. I am saying I believe that using closing prices and smoothing due to delay and averaging does cause indicator inaccuracies relative to the actual market price action, so I doubt they can be used as reliable triggers.

I guess I basically agree - "indicators are only indicators" they can be setup for various time frames minutes , days  or weeks. Which ever is most appropriate to assist the personal trading plan. I will add this though, any workable trading plan should include predetermined entry and exit triggers. These have to be determined prior to entering the position otherwise the chances of winning come down to pure luck, not good planning. 

I was wondering if there was anyone here that has successfully used the MACD to generate trigger points?


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## tech/a (17 August 2015)

> I will add this though, any workable trading plan should include predetermined entry and exit triggers




I don't know that this is totally necessary or true.
For me exits are often generated by price action un known in advance
so it cannot be pre determined.
A trailing stop may not have a pre determined level (ATR).

You may find this interesting

http://summit.sfu.ca/system/files/iritems1/7584/etd2727.pdf


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## AverageJoe (17 August 2015)

Joules MM1 said:


> prob a lot more hindsight than foresight with laggards .....true that with a lack of knowledge a trading plan can be made based on these indicia, i've done such a thing, suffice to say the reason is because the more I ask "what if this..?" then the closer i am drawn to price as most traders eventually do....afterall, if everything starts with the price, it ends with price too ....everything else surrounding price is an add-on based on lack of knowledge or lack of data or both and that's not a judgement so much a recognition of which part of the journey a trader is on
> the difference is in the time taken to make a decision, enact the decision and then have the courage to retract the decision.....I'm saying the closer that price is transacted at the price and not at the laggard the more likely the trader is to gain courage (eventually called experience) and take the next step to being an effective trader
> 
> the bottom line aside from the monetary risk is the large amount of time involved
> ...





A couple of things I have learned through my journey of trading.  I started off with the usual MACD,STOCH,BOLLY BANDS, FIBS etc.. And these were on my chart all at once! Later I started adding Harmonic pasterns but stopped short of indulging in EW/GANN. Like everyone else starting, I thought more is merrier and more powerful a signal. It took a few years of religiously applying the signals with real CASH$ to discover that something I am doing is not right. I now use naked chart but the transition was difficult as I felt I had burst my own bubble. 

Never looked back to these indicators or fancy method. Less is more including trading!

Whether structured system mechanical or discretionary trading style, the plan is the most important thing to follow. Risk reward analysis is what I use to judge if I am going to take a trade with pre-defined trade management. The price is random as soon as I pull the trigger and I will have to depend on previous back test to show me the edge. A few losses does not break a system as a lot of traders will soon discover when pressed psychologically. It is a mind set game and trading psychology I rate much higher than where one gets in or out.

Each market type is a different "beast". I suspect you cannot just transfer a successful system from stock to FX trading. They each have their own personality. One deals with market depth that one can see through the progression while the other needs rapid eye movement when looking at DOM. Stocks will require fills very much dependent on how active and large average traded by volume while Fx is never a problem unless you are the bank processing a large Client's order. 

If it works with maths indicator then all good but I have not found it to be useful, more a hindrance. 

Good luck


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## Joules MM1 (17 August 2015)

AverageJoe said:


> A couple of things........ The price is random as soon as I pull the trigger and I will have to depend on previous back test to show me the edge.




not sure i follow....youre saying price is random, how come only once you've pulled the trigger.....if price is ever random then it's random before, during and after, yeah?

if price is random once youre in, how can you find an edge...an edge defines consistant probability which itself is not random....yeah?

if what you say is true then your game is dependent heavily on money management alone, yeah?

you may have something......just kinda reads like weird logic to me....

edit


AverageJoe said:


> MACD,STOCH,BOLLY BANDS, FIBS etc.. And these were on my chart all at once! Later I started adding Harmonic pasterns .....




that doesnt clearly show you were wrong, it clearly shows a lack of specificity in one regime, too much fuzzy info, too many distractions......again, it doesnt mean you are wrong in any single measure, rather not enough inspection and concentration on one thing, without one step at a time, throwing out what hasnt worked before moving onto include the next measure

yes?


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## Firefly_au (17 August 2015)

Joules MM1 said:


> not sure i follow....youre saying price is random, how come only once you've pulled the trigger.....if price is ever random then it's random before, during and after, yeah?
> 
> if price is random once youre in, how can you find an edge...an edge defines consistant probability which itself is not random....yeah?
> 
> ...




From my experience, since most indicators are derived from basically the same data they all end up indicating the same thing with only minor but sometimes significant differences in timing....so basically it is better to keep indicators simple and well understood than go for complexity imo.


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## AverageJoe (17 August 2015)

Joules MM1 said:


> not sure i follow....youre saying price is random, how come only once you've pulled the trigger.....if price is ever random then it's random before, during and after, yeah?
> 
> if price is random once youre in, how can you find an edge...an edge defines consistant probability which itself is not random....yeah?
> 
> ...




Probably the wrong word to use when explaining price. What I am saying is that the best indicator or whatever tool to give the setup is only a probability play. It does not guarantee the setup will generate a profitable outcome. Once you pull the trigger, the market decide if your edge will play out. Sometime it will and other times it won't. The edge is when the times that does will make you more money than those that doesn't so Risk Reward Ratio comes into play.

As an example;

If you risk 10 bucks to make 2bucks, you will need a big win-loss ratio to make this type of system work. If you win 8 out of 10 trades, you are still losing money if we use constant money money. If you system risk 10bucks but makes 30bucks then you can see if in 10 trades if you win 3 out of 10 trades, you are still making money. 

If you use say a system for example based on MACD since we are discussing this indi, how do you calculate your target? There are obviously ways around such shortfall and the trader using this method will probably say since it is a trend following indicator, if in 10 trade buy or sell signals, they catch 3 of the big trades and rode the trend till the top or bottom depending in direction, they will make up the shortfall of the 7 losing trades. 

In my backtest when I was into mechanical style trend following system in the past on Oz stocks, the win loss was less than 40% winners but it still made money when there is a bull trend. Mine was a long only. I just did not feel comfortable as the GFC rout took hold, firstly I did not get many buy triggers understandable and secondly my system was not backtested under such an extreme market rout. Even though I tested it on the dot com boom/bust, GFC was a different beast as info started filtering out on the state of the capital markets. As humans are creatures of habit, I soon forgot about stocks and started focusing on FX.

So back to what I am inferring, it's a combination of MM, TM, position sizing and compounding or non compounding that can play a big factor to the personality of one's system. I have not done much work on compounding, itself is a dangerous beast if the system has a low win loss ratio if my suspicion is correct.
I trade naked charts using price action so I see cluttering even if I put a MA on the chart but that is just me. I try to get in on an "early" signal and indicators gives me a later signal so the signal will require a bigger stop hence a lower risk reward ratio.


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## AverageJoe (17 August 2015)

I am probably now discussing out of the realms of MACD but this is a price action I noticed from Friday's evening Oz time pre-US news on Consumer sentiment. I do not trade news nor have I found a profitable way to do so but this is what I have found as the price action revealed. Also I do not take trades even 15m chart on a Friday evening leading into the weekend with a potential gap on Monday morning. 

Silver daily TF



Silver 4h TF



Silver 15M TF



The reason I was stalking Silver is because on Thursday it made a reversal bar but that was not the price action bar I was looking for but I like the KEY rejection level. Friday would have to be the next daily candle to be looking ie, Today for Friday's bar to complete. On the 4h TF, you can also see Thursday there was a nice bearish engulf bar but I did not like the block price was trading into.

Anyway on the 15M TF, you can see the news candle initially took price higher but had a bearish wick. Bad US consumer number usually cause a USD selloff and buying of risk currencies or/and commodities generally speaking. The next 15M candle suck in the bulls through the KEY daily resistance, then forms that key rejection pin bar before slamming price down big time. Some will call this stop sweeping to clear out the bear stops of Thursday before the buying stops and bears took over. Who knows why it happens but it just look too obvious to be a natural price action in the course of bulls and bears exerting control especially at such key levels. The price randomness I was referring infer that the bad US news should cause a USD selloff but it did only very initially then the logic got left behind.

So you can see *if* I was trading this setup and I was looking for that MACD or MA crossover, I would be shorting when price has already moved much lower to short into. This is what I mean by "paying" for a late entry. Those that were looking at the bearish pin bar using that candle as risk would have made multiple RR ratio after the following 2 candles and be out on a very good trade.


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## Joules MM1 (17 August 2015)

AverageJoe said:


> I am probably now discussing out of the realms of MACD but this is a price action I noticed from Friday's evening Oz time pre-US news on Consumer sentiment. I do not trade news nor have I found a profitable way to do so but this is what I have found as the price action revealed. Also I do not take trades even 15m chart on a Friday evening leading into the weekend with a potential gap on Monday morning.
> 
> 
> 
> ...




thanks, AJ
good post

....completely agree on the cost aspect in terms of time and obviously price length plus 

traders who use these lags, you still have to decide if youre going to trigger in or out (all 4 executions considered) and of course there's contradiction that while there's lag there's subtle nuances that can  give a heads up but it can lead to emotive logic because the lag makes you into a witness and traders naturally protect their opinion once it is formed (I call this knowing your own context)
which leads to false positives and false negatives (both sides of the bias, meaning that if youre already leaning to STO or leaning to BTO or leaning to STC or BTC) then a subtle action can unconsciously lead you to take signals that are part of the construct of the lag but not part of the construct of the traders activity (price) meaning that you'll obey signals to satisfy your discipline while ignoring your implicit que to take alternative action or vice versa you'll pre-empt the lag and take the wrong action....

kinda using different language with this 

on how anyone may think that the construct of a laggard is equal to the construct of price...that means even tho you consciously know the lag is lagging you dont implicitly understand that it is a stand-alone indicia.....your thinking is stand-alone. it is seperate from price, whereas, lags are modulated of/from price or volume.....so there is value in lags but that value is filtered thru you as the trader which is why they work so well in trends because the trends simply run over false or negative positives and rescue the position....like a jockey dismounting every 100 meters, still finishing the race and if all jockeys did the same thing a race maybe won but if you say to yourself no dismounting let's just keep riding youre odds of NOT losing climb (let's just concentrate on price alone and converse only about price not its derivative)

thanks for the summation of the action in silver.... lower time frames, how are you using those for entry/exits?.....15 min bars are mighty big time frames from this type of approach....


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## AverageJoe (18 August 2015)

Joules MM1 said:


> thanks for the summation of the action in silver.... lower time frames, how are you using those for entry/exits?.....15 min bars are mighty big time frames from this type of approach....




I don't use 15M charts because the noises makes it difficult to enter after having to do the analysis on risk reward etc... It can be done obviously but I chose not to use this time frame. 

My entry TF is usually the 1H (rarely) upwards to 4h, 8H(very ocassionally) and daily.

Exits are RRR analysis coupled with support or resistance levels and candle action of the past. I am not a scalper so less is more personally speaking. 

I have a mechanical style system that trades Cable specifically between Frankfurt/London Open but that one does not use candlestick PA. Purely counter momentum and price and time zone analysis. Trade management is scaling and the idea is to catch as many pips withing one swing or at London close. All risk reward ratio and does not look at news. If I catch a pending order trade it is usually over within a couple of hours at most or if stuck in a trade the aggressive scaling trade management trail the exits usually but occasionally close out at London close. The DNA of this system came from ICT (Inner Circle Trader). I found him and his method of trading through babypips where he used to post under ICT now Michael Huddleston. 

Here is a sample of his weekly review form lastweek, https://www.youtube.com/watch?v=FCABGDw6WjA&feature=youtu.be&a

Note, I got the main idea from his teachings and pick stuff I could incorporate into my style. For someone who teaches them for free and have no interest signing up paid members, you can't get better than this. He has his critics in babypips and I suspect those that blindly follows him on his discretionary system and expect an ATM machine will be duly disappointed!

Enjoy the video. I learned a lot from his analysis and what he looks for. Having said that, his stuff are non retail thinking and you will see how he approached the trades. Enough of promoting him since it is all free and you  decide for yourself if there is value.


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