3 Confluences - Trend lines, MACD, Engulfing candles
The thing with trading is you basically need to know when to get into the trade and when to get out to take your profit and avoid drawdown.
What tells you to enter the trade.
I use Engulfing candles on the 4 hour chart sometimes the daily and then move down to the 4 hour to enter a trade.
The MACD which has a histogram and MACD line and signal line and wen they cross below or above the zero line you'll know whether to enter or exit a trade.
Green circle- Might not of entered this trade the only few confluences I had to take this trade were that the candle I entered on was a 4 hour candle that closed on the other side of a trend line and was a green candle.
The MACD had crossed above the zero line which for a move to the upside you want the MACD to cross under the zero line and the histogram to turn green. This trade would of been risky to take.
The lower the MACD and Signal line cross to the upside the better as the 2 line should cross under the zero line but showing a move to the upside.
Confluences to enter the short position: The candle would of closed on the other side of a trend line ( not shown) and it was a red candle. The MACD line and signal line were high above the zero line and showing a cross for a move to the downside. After a 4 hour candle the histogram turned down to red and stayed red.
Confluences: MACD histogram , trend line (crossed and closed) (not shown) MACD signal line and histogram
You have to watch out for divergences as well with the MACD BUT they are easy to spot.
What tells you to enter the trade.
I use Engulfing candles on the 4 hour chart sometimes the daily and then move down to the 4 hour to enter a trade.
The MACD which has a histogram and MACD line and signal line and wen they cross below or above the zero line you'll know whether to enter or exit a trade.
Green circle- Might not of entered this trade the only few confluences I had to take this trade were that the candle I entered on was a 4 hour candle that closed on the other side of a trend line and was a green candle.
The MACD had crossed above the zero line which for a move to the upside you want the MACD to cross under the zero line and the histogram to turn green. This trade would of been risky to take.
The lower the MACD and Signal line cross to the upside the better as the 2 line should cross under the zero line but showing a move to the upside.
Confluences to enter the short position: The candle would of closed on the other side of a trend line ( not shown) and it was a red candle. The MACD line and signal line were high above the zero line and showing a cross for a move to the downside. After a 4 hour candle the histogram turned down to red and stayed red.
Confluences: MACD histogram , trend line (crossed and closed) (not shown) MACD signal line and histogram
You have to watch out for divergences as well with the MACD BUT they are easy to spot.