This is a strategy that is very simple.
We know MACD signal line over zero line indicates bullish o longing area. Below zero line is bearish o shorting area.
In this chart i show example of entries and exits with very good results:
- At the time when signal line crosses over 0, we enter long position. We are going to exit when MACD crosses below signal. We will reenter a long position when MACD crosses again above signal line.
- At the time when signal line crosses below 0, we enter short positions. We are going to exit when MACD crosses above signal. We will reenter a short position when MACD crosses again below signal line.
As you can see, following this, we had 3 exit trades (100%-130%-30%) and one with no profits-loses. Now signal is crossing above zero line, so we should've entered long position.
I am using more indicators, but i want to show here how other indicators can help you avoiding bad signals.
Stoch: When you are longing a position, you should close your position if stochastic goes to overbought territory and goes out from there (blue !). Same if you are shorting and stoch goes to oversold territory and goes out, SPECIALLY if some divergence is happening.
ADX: As you should know, you will improve your results when you trade in favour of a trendy chart. ADX over 20 indicates PA is trendy. So, if there's a signal of longing or shorting when ADX is below 20, you should be careful, and even avoid trading (For example no entering the two shorts positions i played on chart).
Future post i will explain other indicators and plans.
Thank you all
We know MACD signal line over zero line indicates bullish o longing area. Below zero line is bearish o shorting area.
In this chart i show example of entries and exits with very good results:
- At the time when signal line crosses over 0, we enter long position. We are going to exit when MACD crosses below signal. We will reenter a long position when MACD crosses again above signal line.
- At the time when signal line crosses below 0, we enter short positions. We are going to exit when MACD crosses above signal. We will reenter a short position when MACD crosses again below signal line.
As you can see, following this, we had 3 exit trades (100%-130%-30%) and one with no profits-loses. Now signal is crossing above zero line, so we should've entered long position.
I am using more indicators, but i want to show here how other indicators can help you avoiding bad signals.
Stoch: When you are longing a position, you should close your position if stochastic goes to overbought territory and goes out from there (blue !). Same if you are shorting and stoch goes to oversold territory and goes out, SPECIALLY if some divergence is happening.
ADX: As you should know, you will improve your results when you trade in favour of a trendy chart. ADX over 20 indicates PA is trendy. So, if there's a signal of longing or shorting when ADX is below 20, you should be careful, and even avoid trading (For example no entering the two shorts positions i played on chart).
Future post i will explain other indicators and plans.
Thank you all
Trade active:
Nice, we are up more than 10%.
Remember, ADX is telling us we are still on sideways, no trendy, so we have to be careful:
- Stoch is now in overbought territory. In theory we need to stick on the trade, but the most conservative traders should start taking profits. I am waiting for the stock doing a bearish divergence or getting out after being on overbought.
Nice, we are up more than 10%.
Remember, ADX is telling us we are still on sideways, no trendy, so we have to be careful:
- Stoch is now in overbought territory. In theory we need to stick on the trade, but the most conservative traders should start taking profits. I am waiting for the stock doing a bearish divergence or getting out after being on overbought.
Trade active:
30%, our plan is working, very nice.
Alarms: Volume today is still low, lets see how develops, a lower volume should rin a bell in our minds
Good news: ADX on trendy, if closes today like that, i would add RSI to the trade. If not, i still stick to stoch.
S/R important area between 3-3.50$
30%, our plan is working, very nice.
Alarms: Volume today is still low, lets see how develops, a lower volume should rin a bell in our minds
Good news: ADX on trendy, if closes today like that, i would add RSI to the trade. If not, i still stick to stoch.
S/R important area between 3-3.50$
Trade closed: target reached:
3-3.50$ reached. 40% profit. More than enough. Time to close the whole trade? we can let ride a part of the trade, still no strong signal to close it.
ADX-DI: Showing trendy movement so we look now to RSI, which is highly overbought but that is not a signal to close the trade, only if goes down and crosses the overbought line.
Stoch: Altough we changed to RSI, stoch is not looking good for the trade, crossed bearish and almost getting out from overbought.
So a part of the trade is still on play, because there's no a clear signal to close the trade, but profit was great and i don't wanna get caught with the whole trade if a big black candle appears suddenly.
3-3.50$ reached. 40% profit. More than enough. Time to close the whole trade? we can let ride a part of the trade, still no strong signal to close it.
ADX-DI: Showing trendy movement so we look now to RSI, which is highly overbought but that is not a signal to close the trade, only if goes down and crosses the overbought line.
Stoch: Altough we changed to RSI, stoch is not looking good for the trade, crossed bearish and almost getting out from overbought.
So a part of the trade is still on play, because there's no a clear signal to close the trade, but profit was great and i don't wanna get caught with the whole trade if a big black candle appears suddenly.
Trade closed manually:
RSI crossing overbought, i closed the whole trade
¡ NICE PROFITS !
RSI crossing overbought, i closed the whole trade
¡ NICE PROFITS !
