MACD Technical Analysis Question
You know what's great about your theory? With MT4/MQL4, you can translate your theory into code and then run your code on historical data and see if there's any substance to your theory.
Now, that should keep you busy :)
C
> The best indicator on the macd is when the signal line and MACD line's intersect. That's typically the best indication of a trend reversal.
Unless the market is ranging, then MACD gets terribly lost
Crosses too close to the zero line are likely to be false signals
> go easy on (you)
We might be but why should we?
The market most certainly will not be :(
FWIW
-BB-
C
> The best indicator on the macd is when the signal line and MACD line's intersect. That's typically the best indication of a trend reversal.
Unless the market is ranging, then MACD gets terribly lost
Crosses too close to the zero line are likely to be false signals
> go easy on (you)
We might be but why should we?
The market most certainly will not be :(
FWIW
What do you mean by "ranging", Barrow? Also, how far would you be away from the 0 line to consider a signal a true signal rather than a false signal?
And Blog, I'll give it a shot. We'll see how it goes. :)
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I'm working on a new theory. It may help, or it could be a shot in the dark. I've rewritten elements of the MACD so that is will monitor the difference between the MACD and its signal line. I am operating under some assumptions, and would like opinions on whether or not the MACD could be used for this, or if I'm missing something else that this indicator might show me.
My Assumptions:
1) The best indicator on the macd is when the signal line and MACD line's intersect. That's typically the best indication of a trend reversal.
2) If a stock is trending up, the MACD line will be a higher value than the Signal Line. If the difference between the MACD Line and the Signal line is say 2 points on the first bar. On the next bar, its 3 points, after the 2nd its 4 points of difference. The more the MACD line diverges from the signal line, the strong the trend is up, and pips should accrue faster. Now lets say we get to the 4th and 5th bars and the difference between the MACD & Signal is now only 2 and 1 respectively. Somewhere in that range of when the difference reduces (and the MACD & Signal lines start to converge), this is an excellent signal to close a position.
I'm a newb, so go easy on me :)