How to use MACD

[asarda007]

Hi folks...

As a REAL beginner in FOREX I have been studying the Euro$ movements using nothing but MACD indicator and (to my ignorance on this subject) it appears to be a fairly good indicator as to where the price is going. I am currently using the default values (26,12,9) on the MACD and am using a time frame of 4 hours 10 days as I am interested in short term trading.

Could anyone please tell me what else can I use in combo with MACD to draw a more complete picture as to what is likely to happen. Am I using the right settings & time frames. I have heard a lot about a variety of indicators - all a bit confusing as everyone has their own, AND much to my frustration they all demand input parameters.

Any help would be highly welcomes.
Thanks in advance.

A.

 

[JonnyT]

I wouldn't trade with MACD or any other indicator.

You need to consider what your trade plan is...

For example, entry criteria, stop criteria, moneny management strategy.

JonnyT

 

[ilia king]

JonnyT has a good point, I use MACD 5,34,5, check out this thread: http://www.trade2win.co.uk/boards/showthread.php?p=101029#post101029

 

[rossored]

I'm with Jonny (and others) on this. I dont use indicators at all.

 

[One Eyed Shark]

Asarda

I have traded profitabily just using MACD although it is not my indicator of choice at the moment, everyone has different trading styles and we all view and interpret the market in a different way hence the fact that some traders find it works for them just to use price , while others like myself find it easier to interpret the market using an indicator.

If you are going to trade off MACD you need to get to know it inside out, just trading off crossovers of the signal line will not be profitable, there are too many nuances of MACD to include in a single post but if you go to Stockcharts.com there is some excellent educational info there, MACD works very well if you filter short term signals off a longer timeframe i.e. 3 min and 1 min / 5min and 15 min etc.

As for combining it with another indicator I would have my reservations, some traders combine MACD with a Stochastic you could also take a look at RSI, and CCI ( see Chartmans thread on the Dow), but the benefit of combining two or more indicators for me personally does not work, I find it much more beneficial to trade off one indicator I know inside out and use time as the only other filter.