Help needed - MACD trading, 3 min charts.

[nkruger]

Good morning one and all, I'm trying to develop a trading strategy using MACD on 3 minute Indicies charts (Dow, Dax, Ibex) and I am finding that it's not getting me in early enough.
I have read somewhere on these boards (Jack O'Clubs I think) that Appel- the father of MACD - recommends 9 16 6 settings. Has anyone used these settings ? and has anyone got his book that they would be willing to sell ?
Any views, also, on varying settings and their successes ?

NK

 

[Jack o'Clubs]

Appel recommends the standard settings, but if the market trend is very positive he says you can use 'fast buying and slow selling', with 6/19 and 19/39 settings respectively. When he talks about intraday he says MACD can 'even' be used intraday, ie it's not exactly his preferred timeframe, and I don't remember him doing anything less than 30-minutes, certainly not 3. IMO, there's far too much noise in a three-minute chart for any trend following method to work consistently. Put it another way: his book gives far more coverage to using MACD on weekly or even monthly data, than it does intraday.

When you read the book you realise that the knack in applying MACD is, like any indicator, using it with a high degree of discretion rather than slavishly following 'rules'. And like any indicator, this means success is more driven by the trader's intuitive skills than by the indicator itself. FWIW, I do use MACD, but on none of these settings, and it only highlights potentially interesting trades, I don't use it as a trigger.

His book is available on Amazon.

 

[nkruger]

Thank you Jo'C, I'm on MACD revision today, and your input is most welcome. Be nice if I can get Amazon to deliver the book before I embark on my hols.....

NK

 

[bluetipex]

Hi NKruger

I agree with Jack, 3 min chart is far too fast to trade effectively IMHO. I use MACD on non-standard settings on a 15 min and 5 min chart. I use it for a trigger!!! I ONLY take trades on the 15 min chart, but use the 5 min to fine tune the entry. I only trade with the trend, OR at the beginning of a new trend.

The MACD I use is quite slow, so I also use Stochastics as the "heads up". MACD is the "confirmation".

If you want to make good money intraday then use a 60 min, 30 min or 15 min as your "umbrella" chart, and don't take trades against it. This will give between 0-3 trades per day. That's all you need IMHO. (0 trades is very rare).

Sometimes you have to get in on a pull back or retrace, but there are ways of doing that too. Today for example my MACD gave a sell signal at 10.45 this morning on YM, and is still in a sell now! That's been the only signal all day. So if you started at 2.30 you'd have to get in on a retrace to short.

I've come across people using a 144 tick chart, doing 20-30 trades per day. Each to their own of course, but that would do my head in. 1-2 trades a day is just fine for me!

Only shorts for me today on YM of course....

Good Luck.

 

[nkruger]

Interesting, Bluetipex, thanks for that. What's your settings for MACD ?

 

[Samuel_J]

There are no general good settings for MACD which produce better solutions than a simple buy-and-hold strategy!
If there were, it would have been far to easy to detect!

But you can improve MACD by making it more intelligent.
The results are smoother curves and with less delay.

Moving Average Plugin:
Jurik's JMA

Trading Software with improved MACD:
Optimal Trader's OptAMA

Expect no miracles from intelligent moving averages, but they do improve MACD a bit.

 

[rols]

By way of coincidence I was reading an article yesterday by Linda Rasche about the settings for the MACD Grail

You'll find it here (half way down) in this useful library...

Articles and Reprints on Trading

 

[nkruger]

There are no general good settings for MACD which produce better solutions than a simple buy-and-hold strategy!




Mmmmm.

Sounds dangerous......




.

 

[Mornington Crescent]

you may find macd is more useful on S&P than on the Dow

 

[bnaimy]

Hi, there is no magical way of getting you in early with macd, the only solution that i have found to work for me is to use more timeframes. If u wanna trade from the 3min then u should have a 2min or 1min macd on those smaller time frames. because 2min will get u in faster then 3 and 1min faster the 2, u get my point, when u see macd on the 3min getting closer but not yett to take it long, then look at ur 2min chart with macd and if that crosses and hookd u can take the trade long.

Thats on way of doing it, there are also a few more ways of getting this done, but i am short on time, and will add more info whenever i can .

Good luck with your trading m8

Bashir Naimy

 

[nasar64]

Dear Friends, I am willing to know the best setting for intraday tradeing which give us buy sell signals if any one explain me please

NASAR

 

[IanMacQuaide]

I trade the Dow Mini Index.
Here's one I just can't get away from. Put up a standard set (12-26-9) MACD, and a 9EMA. Watch how price goes thru the 9EMA in concurrance with the MACD crossing it's MA, preferably it's Zero line.
I just got thru playing with Ichimoku, and while I see it's potential, I keep going back to this MACD method.
I just found out what help it is to watch a 1 Hour chart along with my 2 Minute entry chart. I was using a 10 Minute for direction, but the Hourly chart really makes a difference.
<still learning...

 

[GrayTrader]

Interesting bunch of replies, and opinions; let me add my own.

I trade off RENKO charts, & use only the Macd for my entries. Generally, but not always, I exit on a take profit of 60 pips, with a 5 lots trade.

My RENKO bricks are set at twenty, & Macd to 3,6,3. Entries are off a RENKO close above/below the 0.0005/-0.0005 levels.

I only trade the GBP/USD & EUR/USD. This week both gave me 60 pips, 120 in all.
I make a nice living, & have no hassel. Until I found this system, the 'speed' of forex trading was the bit that always beat me. Now it's slowed right down & is real easy to trade.

 

[anley]

Guys, one thing you must take note of is the cost of doing business on a 3m chart. basically unless your comms are super cheap and you have a chance of buying the bid (selling the offer) it's basically going to be impossible for you to make money overtime. Work out the costs and you might find you're paying up to 10% commission per trade, win or lose. At 1% it's tough, but at 10% it's as I said almost impossible.

Good luck anyway.