MACCi Charts

[pedro01]

MACCi Charts Analysis

All

I have been on the TT forum for a few weeks and have decided that the MACCi trading strategy is worth looking into.

I am a part-timer, in no hurry to trade and watching the MACCis with a view to getting used to them, paper trading them and eventually going live trading.

I will post interesting MACCI charts here and my interpretation. Please feel free to do the same.

Cheers

Pete

 

[pedro01]

Yesterday (6th October, 2008) was a little doom & gloom. As I am in Asia, I am usually on CNBC just after the Aussie & Japan opens which were all well down in the morning sessions.

I'd have had a fundamentally short view on the market IF there was any specific news for the day but to be honest, there really was nothing specific but sentiment feeding on sentiment. I decided therefore to stay neutral & watch the charts.

I took the screen shots live. As the markets were going down, we had all 6 time frames oversold at 10:48 (2008.10.07-a.gif). Not only were they oversold but in my opinion the 10,5,3 & 1 min charts were all showing signs of exhaustion. At that point, I didn't take a paper trade as I am still missing a few pieces of the strategy. When I saw this, my first thought was 'reversal' and not correction.

Charts 2008.10.07-b.gif & 2008.10.07-c.gif show how the market did indeed bounce up off this BUT this did end up being more of a correction that a reversal - so I called it wrong.

Chart 2008.10.07-d.gif shows the 10 min chart for the day. As you can see - the 10 min rolled over just after 11:30am giving lots of time to close out 75% of a trade and Stop Loss the rest @ entry + 2c.

Even though I called it wrong in terms of reversal vs correction - it still should have been profitable based on pulling out 75% when the 10 min MACCi rolled over.

 

[pedro01]

Well - 9th October & times are more interesting than ever.

Last night I wasn't looking at the charts because I was out to dinner with the Senior Sales Director for Asia Pacific of a HUGE global tech company. He was telling me that for the past 6 weeks, his customers have completely pulled the plug on infrastructure spending and that for this quarter - he'll only make 50% of his target. He's not sure about the other regions but I would guess this company will miss it's quarterly EPS targets by a mile when they announce.

So - to the charts. First chart is the daily $INDU -

http://www.trade2win.com/boards/attachment.php?attachmentid=41014&stc=1&d=1223612428

As you all know - it's gone down for 6 days straight yet at todays open, the hourly MACCi was still pointing up. This means either my MACCi is wrong or that in the current market, the 60,min indicator is sending out a bullish sentiment which is obviously not correct.

http://www.trade2win.com/boards/attachment.php?attachmentid=41016&stc=1&d=1223612428

Around 10:30, the 60 minute MACCi finally rolled over - so we had the fundamental picture and the technical picture back in line with each other.

http://www.trade2win.com/boards/attachment.php?attachmentid=41018&stc=1&d=1223612428

With this in line, we would now wait for an overbrought on the lower time frames to turn over and take a short trade.

http://www.trade2win.com/boards/attachment.php?attachmentid=41020&stc=1&d=1223612428

Looking at the above at 11am, was that something we could realistically expect to happen today ? As you can see, the MACCis are moving up but rolling over pretty quickly too.

At that point, I decided to leave it for the evening. In the morning, I looked back and saw that at 2pm, there was a roll over of the 10 & 30 min which was interesting yet the lower time frame was still oversold so I didn't see any place from which to take a high probability trade.

http://www.trade2win.com/boards/attachment.php?attachmentid=41022&stc=1&d=1223612428

Any thoughts ?

 

[lote_tree]

Hi Pedro

Yesterday was very tough. I came close to trading a paticular set-up but didn't take it in the end because it didn't fully meet my criteria for entry. However if you were happy to take on more risk then it would have been a great trade. I've also enclosed a chart of the ES contract I trade. Yes, I want to shoot myself

The point of entry in question is around the 16:48pm GMT mark. All lower TF's as can be seen were all OB. The only problems again (this keeps coming up) were the 10min and 30 min. 10 min is pointing against us and the 30 min is OS. The saving grace for this trade would have been the 60min. My fear for this trade was the 10min cycle taking control and pushing the 30 min up with it if a violent rally was to ensue, which could have happen given the huge swings we are seeing. But given the current crisis and lack of buyer confidence in the market a sell off was more likely.

I think the key thing to think about is which cycle is in control. Clearly it has was the 60 min yesterday.

Ultimately the murky picture and the times we are in now made me err on the side of caution. I'm not trading the Macci's until I get as close to a perfect set up as I can get. That means all TF's OB so I can consider shorting a rally.

Please ignore the green lines they are set up for today's trading day.

Cheers

Naeem

 

[jitasb]

Hello.

I haven't got macci on tradestation, as I use a "version" on quotetracker. But yesterday around 7pm. The 10min rolled over and started heading downwards. At this time both the 30min and 60min were pointing down. So using the 10min , that would have given a signal for shorting.
From one of the previous seminars which I am going thru, it said that if you have the 30 and 60 in your favour with a "fair" amount of distance to go then once the 10min starts heading in the same direction, then that is a good entry signal.

Am I understanding it correctly ?

Thanks.

P.S> I don't know what the 1,3,5 were doing. But presumably at some point there would have been a signal as long as the 10 min stayed heading down ?

 

[Charlton]

Hi Pedro

Yesterday was very tough. I came close to trading a paticular set-up but didn't take it in the end because it didn't fully meet my criteria for entry. However if you were happy to take on more risk then it would have been a great trade. I've also enclosed a chart of the ES contract I trade. Yes, I want to shoot myself

The point of entry in question is around the 16:48pm GMT mark. All lower TF's as can be seen were all OB. The only problems again (this keeps coming up) were the 10min and 30 min. 10 min is pointing against us and the 30 min is OS. The saving grace for this trade would have been the 60min. My fear for this trade was the 10min cycle taking control and pushing the 30 min up with it if a violent rally was to ensue, which could have happen given the huge swings we are seeing. But given the current crisis and lack of buyer confidence in the market a sell off was more likely.

I think the key thing to think about is which cycle is in control. Clearly it has was the 60 min yesterday.

Ultimately the murky picture and the times we are in now made me err on the side of caution. I'm not trading the Macci's until I get as close to a perfect set up as I can get. That means all TF's OB so I can consider shorting a rally.

Please ignore the green lines they are set up for today's trading day.

Cheers

Naeem

Naeem

I can only repeat what Iraj has said many a time - the 10 min macci is of prime importance.

60, 30 and 10 provide direction and I would never trade against the 10 min. If they all line up then perfect. If 60 lines up with 10 or 30 lines up with 10 then you have, IMHO, a good but less than perfect entry.

In your screenshots it looks as if 60 min is around -40 and heading down, 30 is oversold and 10 min is around 0. For me I would not give a damn that 1,3 and 5 were all at or nearly overbought, because the other 3 timeframes give a confused message. I would use the 1,3,5 for fine tuning the entry provided at least 2 of the other timeframes (and always including 10 min) backed me up.

Otherwise it would be gambling and to reflect that would require a much smaller position size.

I think this is borne out by your ES chart which to me seemed to be going through a consolidation phase and then around 14:00 exchange time the 30 and 10 are turning down (having never reached overbought) and everything sinks.

Clearly it was possible to make a good deal of money yesterday with the general drift down, but I didn’t really see any clear MACCI setups to point to good entries.

So I would agree with Pedro’s analysis.

Charlton

 

[lote_tree]

Charlton,

So for the potential trade I posted are you looking for the 10 min to point down before taking the trade regaldless of whether it's at the OB level? You just need it pointing down as long as it's not near the OS level, yes?

My reasoning for the potenial trade was not just based on technical info but it also considered the heavy bearish sentiment in the market. You can't ignore the news surrounding the markets if you're day trading. Given this and with the 60min in our favour indicating a very weak market the probabilities of a short position working out were more than 50/50 IMHO.

But as you've rightly pointed out from a pure technical stand point the trade could not be considered. I'm a novice when it comes to Macci trading so I didn't take the trade even with a small position size. Learning when to break some of the rules with this method is for the more advanced guys.

Your insight is valuable so thanks for keeping us on track matey

Naeem

 

[Charlton]

Charlton,

So for the potential trade I posted are you looking for the 10 min to point down before taking the trade regaldless of whether it's at the OB level? You just need it pointing down as long as it's not near the OS level, yes?

Well of course the 10 min might enter the OB region and stay there or continue upwards if there was a strong market, just as it entered the OS region yesterday at 14:40 ET and remained there until the end of the session during the weak market.

Yes - we are looking at the 10 min to turn and head down or up in line with the sentiment of he market, which would be indicated by the higher TFs

The exact level of the MACCI, as Iraj said doesn't necessarily have to be + 100 or -100, but we are looking for a turn around the top of the range. I think Iraj mentioned this in one of the last 2 seminars.

My reasoning for the potenial trade was not just based on technical info but it also considered the heavy bearish sentiment in the market. You can't ignore the news surrounding the markets if you're day trading. Given this and with the 60min in our favour indicating a very weak market the probabilities of a short position working out were more than 50/50 IMHO.

I agree - clearly there were good shorting oportunities and the general news and sentiment bears this out, so I would agree that the odds are very much in your favour

But as you've rightly pointed out from a pure technical stand point the trade could not be considered. I'm a novice when it comes to Macci trading so I didn't take the trade even with a small position size. Learning when to break some of the rules with this method is for the more advanced guys.

Your insight is valuable so thanks for keeping us on track matey

Naeem

Iraj has spoken in the past about technical and non-technical days, where the latter are days when major influences on the market occur and when it is difficult to apply the cycle analysis. Certainly I believe that yesterday was such a day, where you could short the market and make money, but where the MACCI signals are not as clear as one would like.

I would be interested in Iraj's view on whether or not and how he would trade such a market.

Charlton

 

[jitasb]

When you guys have some time, wonder if someone could post their macci charts for Thurs 9th Oct and Fri 10th Oct. Just wanted to check them with mine. (the 10,30 and 60min).

Many thanks.

 

[pedro01]

Chartlon, Naeem

- I think Charlton pretty much nailed it with his reply there. I personally want a bit more confirmation, although I am not really sure that is what I did on Friday...

10th October

Friday night & I was having some serious data problems with Tradestation - basically Radar screen wasn't updating but charts were OK. I guess it's all the lonely Thai teenagers cracking one off to interporn on a Friday night. :whistling

So it was all doom & gloom in the news again but I was neutral at the start of the day - nothing goes down forever in a straight line after all. The first hours trading sparked off a lot of 'sky falling in' news reports but to me - this was a potential sign of exhaustion of the downtrend:

Look at that first 1 hour bar - if a candle could be sexy - that one certainly would be !

With this candle plus the MACCI 60 over sold & the MACCI 30 pointing up, I decided that a buy trade might come up.

At around 11:40, the 10 min started to point up, 30 pointing up. 60 was levelling in OS area. 5 & 3 pointing up.

I went long ESI - 200 shares @ 66.47. At this point my radar screen was crapping out on me, so I didn't have my position size number, so the 200 was a guesstimate

MACCI 10 soon turned down -

I immediately closed out 75% of my position - 150 shares @ 68.16.

Anyway - just before midnight Thailand time, I got really frustrated with Tradestation, it simply wasn't giving me the data I needed for either position sizing or on stocks that were stronger than the market. At that point the MACCis were looking pretty good.

I would imagine there would have been other long opportunities later on but anyway as I wasn't gettting the data I needed to trade according to the plan, I closed out my position - 50 remaining shares @ 70.40.

Profit for the morning - $443.50.

Note - this is on a simulated account using Tradestation. As I am doing it real time, slippage & non fills on limit orders are as close to real as can be on a demo account.

Now - I've only been looking at MACCis for 2-3 weeks, so do not think I am an expert.

PLEASE DO CRITIQUE MY ANALYSIS - that's the purpose of this thread.

btw - I have a pretty high screen resolution - if this post was a pain to load, I'll revert back to posting the charts as links - please let me know.

Pete

 

[Trader333]

What made you choose ESI to trade ?
If Radarscreen is causing issues then it is possible that a position size indicator could be used on a chart instead and you just change the instrument name to that you wish to trade.


Paul

 

[pedro01]

What made you choose ESI to trade ?
If Radarscreen is causing issues then it is possible that a position size indicator could be used on a chart instead and you just change the instrument name to that you wish to trade.


Paul

About 10 minutes earlier, the N Minute Change on radar screen was showing it as the strongest in relation to the $INDU. I have a position size radar screen that had no data for it - but a chart is a good idea.

A number of other stocks may have been stronger that this BUT the bottom of my radar screen had 10 stocks with no data. I just took what I had and ESI was in +ve territory and clearly stronger than the DOW.

 

[lote_tree]

Charlton,

I went through the last seminar once again just to make sure I didn't miss anything. If you have an unedited version of the recording you will hear Iraj consider a trade without the 10min being in his favour. It's at the 2:00 hour mark in the unedited version.

He says that he's waiting for the 1,3 and 5min to get OB before going short, obviously the 30 and the 60 are in his favour. But he says that once the 1,3,5 get OB and he's in the trade he'll be looking at the 10min and see whether the lower TF's bend the 10min down with them. If the lower TF's don't manage to bend the 10min he'll close his short position.

Any views on this?

I think this demonstrates how important it is to consider the wider context before considering a sub optimal entry. If the context is heavily with you then a sub optimal technical entry can be considered provided you pay close attention. However if the context isn't with you in anyway a safer approach would be to stay away from less than perfect entries.

Getting a fine balance and knowing when to break certian rules can only come with experience so it's best for beginners with the Macci just to stick with strong TA entires regardless of context.

Cheers

Naeem

 

[Charlton]

Charlton,

I went through the last seminar once again just to make sure I didn't miss anything. If you have an unedited version of the recording you will hear Iraj consider a trade without the 10min being in his favour. It's at the 2:00 hour mark in the unedited version.

He says that he's waiting for the 1,3 and 5min to get OB before going short, obviously the 30 and the 60 are in his favour. But he says that once the 1,3,5 get OB and he's in the trade he'll be looking at the 10min and see whether the lower TF's bend the 10min down with them. If the lower TF's don't manage to bend the 10min he'll close his short position.

Any views on this?

I think this demonstrates how important it is to consider the wider context before considering a sub optimal entry. If the context is heavily with you then a sub optimal technical entry can be considered provided you pay close attention. However if the context isn't with you in anyway a safer approach would be to stay away from less than perfect entries.

Getting a fine balance and knowing when to break certian rules can only come with experience so it's best for beginners with the Macci just to stick with strong TA entires regardless of context.

Cheers

Naeem

Naeem

I can't find the exact section of the seminar you mention, but I would suggest that you also listen to at least the previous 5 mins to get an idea of the context.

In my earlier message referring to the 9th I pointed out that "In your screenshots it looks as if 60 min is around -40 and heading down, 30 is oversold and 10 min is around 0. For me I would not give a damn that 1,3 and 5 were all at or nearly overbought, because the other 3 timeframes give a confused message"

So in the above situation I don't think there is clear backup for a trade.

In the case you refer to in the presentation Iraj has said that there is strong backup from the higher TFs 60 and 30. I assume at the time the 10 min wasn't yet aligning with these as he would have liked and I assume that the 1,3 and 5 mins were moving towards alignment, so he was considering a short position.

Iraj has, in the past, during seminars gone into a trade in advance of the 10 min falling in line, but note the caveat that you quoted "If the lower TF's don't manage to bend the 10min he'll close his short position".

So Iraj could do this in this situation because of strong backup and because he is the master, but he still emphasises the importance of the 10 min by being prepared to pull out of the position at any time if the 10 min is shown not to follow.

If the 10 mins follows then it becomes an optimal entry and it continues open until the cycle comes to an end. If it doesn't follow he closes the position and waits until the 10 min aligns as well.

It's just a case of trying to get in a little earlier, but with caution.

It would be interesting to see, if in that particular case, he reduced position size or not.


That's an interesting example to bring up because I think it only reinforces the importance of 10 min.

Charlton

 

[pedro01]

Naeem

Let me first say that there is nothing like getting your hands dirty. I won't overanalyze what Iraj would do in every situation, I'd rather play with this for a month or so and keep listening to the recordings and let this settle in 'subconsciously'.

Saying that, my understanding is that the highest profile trade is when the higher timeframes provide direction & the lower ones are OS/OB. Saying that, I also understand that Iraj wil take 'lesser trades' when not all of the signals agree. I think that it would be impossible to ask Iraj to list all the 'lesser trade' conditions as that is something that comes with experience. Anyway, the top down approach mitigates a lot of the risk.

Now - in my Friday trade, not all of the timeframes agreed - that may or may not have been a trade that Iraj would have taken and over time I will hone my judgement on lesser trades by performance and experience. I may end up ignoring them.

I ultimately took the trade as I did not expect it to be a scalp, so basically I took no notice of the 1 min. Right or wrong, who can say ?

For the 10 minute, my understanding is that on day trades, when the 10 min turns against you, it's time to take 75% off the table. Even though I thought I would hold that trade for a while, the 10 min went against me & I took out 75%.

Note though - that I am a complete novice to day trading. I don't know your experience level or if you are trading this live. If not - why not demo it & post up your notes here ?

Ultimately - I feel that I have to take this thing & make it fit me for it to work for me.

I make my notes & screen shots at the time & then post them here the next day. I do not re-write my thoughts - just write what I noted at the time.

Cheers

Pete

 

[Charlton]

Naeem

Now - in my Friday trade, not all of the timeframes agreed - that may or may not have been a trade that Iraj would have taken and over time I will hone my judgement on lesser trades by performance and experience. I may end up ignoring them.

I ultimately took the trade as I did not expect it to be a scalp, so basically I took no notice of the 1 min. Right or wrong, who can say ?

Pete

I would say that your trade at 11:40 was a resonable trade - 30 was o/b and heading up, 10 was in that o/b zone and heading up and 60 was still oversold. In addition you had 5 and 3 just coming out of o/b and headng up. It might have been nice to have the 60 heading up as well, especially with the market as it is - doom and gloom as you say. The daily and weeklys would have been down too, so I think at best this would be a very tentative short-term long that would need watching. Indeed you said the 10 min turned down quickly.

For the 10 minute, my understanding is that on day trades, when the 10 min turns against you, it's time to take 75% off the table. Even though I thought I would hold that trade for a while, the 10 min went against me & I took out 75%.

Your understanding is correct and at that time you had made virtually $2 per share already. I assume that you would have also set a break-even + 2 cents stop on the remaining 25%, which you could theoretically let run if circumstances looked favourable.
You let it run and gained a further $2 per share before Tradestation screwed up. By the way it happened with everyone - my charts were not updating either.

So that's $443.50 of reasoned low-risk proof of the strategy. :clap:

Charlton

 

[lote_tree]

Naeem

I can't find the exact section of the seminar you mention, but I would suggest that you also listen to at least the previous 5 mins to get an idea of the context.

In my earlier message referring to the 9th I pointed out that "In your screenshots it looks as if 60 min is around -40 and heading down, 30 is oversold and 10 min is around 0. For me I would not give a damn that 1,3 and 5 were all at or nearly overbought, because the other 3 timeframes give a confused message"

So in the above situation I don't think there is clear backup for a trade.

In the case you refer to in the presentation Iraj has said that there is strong backup from the higher TFs 60 and 30. I assume at the time the 10 min wasn't yet aligning with these as he would have liked and I assume that the 1,3 and 5 mins were moving towards alignment, so he was considering a short position.

Iraj has, in the past, during seminars gone into a trade in advance of the 10 min falling in line, but note the caveat that you quoted "If the lower TF's don't manage to bend the 10min he'll close his short position".

So Iraj could do this in this situation because of strong backup and because he is the master, but he still emphasises the importance of the 10 min by being prepared to pull out of the position at any time if the 10 min is shown not to follow.

If the 10 mins follows then it becomes an optimal entry and it continues open until the cycle comes to an end. If it doesn't follow he closes the position and waits until the 10 min aligns as well.

It's just a case of trying to get in a little earlier, but with caution.

It would be interesting to see, if in that particular case, he reduced position size or not.


That's an interesting example to bring up because I think it only reinforces the importance of 10 min.

Charlton

Like I said I've listend to the seminar again. The context is very clear. We had a market doing nothing because of the bailout plan. Iraj was waiting for the 1,3 and 5 to get OB. The 60 and 30 were pointing down but the 10min was not. Not a perfect entry but he refers to it as a "risk adjusted" entry because of the 10 min.

The reason I mention it is because you said in your earlier post that you would never trade against the 10min. I just wanted clarification on whether that's purely down to your risk tolerance and style of trading rather than what Iraj has espoused about the 10min?

Also what's your average holding period for a trade?

Cheers

Let me first say that there is nothing like getting your hands dirty. I won't overanalyze what Iraj would do in every situation, I'd rather play with this for a month or so and keep listening to the recordings and let this settle in 'subconsciously'.

Pete,

Understanding must precede action, especially when you're trying to integrate new ideas into your trading. I've been listening to Iraj's recordings many a times as well and currently practice them on futures. My experience has mainly been in the realm of position trading futures, I've never traded stocks before. I day trade S&P and Crude oil futures but I don't do it very often. Risk control in day trading futures is a very difficult task. Not many people are cut out for it. That's why when I see how Iraj manages risk when trading with stocks I see a true master at work. Bottom line, if I'm going to day trade it will only be with stocks from now on.

Iraj's work is similar to how I position trade futures. There's much more to my trading but I basically trade pullbacks of the weekly trend against the monthly. The whole premise being that trends that run counter to the next larger time frame tend to be abortive. So most of the time i'm giving weight to the larger time frame. This is why my bias when looking at the Macci's is to look at the 60min first before anything else.

I see all smaller TF's in the macci's as smaller waves within the larger waves of the 30 and 60min. When the samller waves start to diverge from the larger waves that's when opportunities potentially arise.

I definately think you're on the right track by writing everything down. Writing notes and posting your screenshots will intergate these concepts at the subconsiouse level very rapidly. Even better, I know that you're new to this just like me, but teaching it to others is a very good way of integrating it quicker.

Cheers

Naeem

 

[pedro01]

Naeem

There are many ways up the mountain. There's certainly no reason that you & I can't get there by following different paths. In fact - that may help us both if we keep in touch,

I agree that understanding must come before committing real funds to this strategy.

I don't want to overstudy this as it's dull. I want to interact with it. I also think that if I blow up a couple of $100K accounts learning this that it will bring me closer to understanding.

As for teaching others being a great way to learn. I do actually have to learn & teach new technologies. In fact whilst I am learning the technology myself from R&D people, I develop the course at the same time. A week later, I'll be teaching people that course. The funny thing is - sometimes, I'll never touch that technology again and 3 years later someone that has been using it consistently will ask me to help them as they think I am the guru !

Anyway - you are spot on about teaching others being a great way to learn. In this thread my goal is to teach myself & others by the mistakes I make along the way.

BTW - Naeem - that's an unusual name, are you from the UK ? Iraj sounds like he's from the Midlands like myself - where are you from ?

Cheers

Pete

 

[lote_tree]

Pete,

I sincerley hope you don't have to go through this before you gain understanding:

I also think that if I blow up a couple of $100K accounts learning this that it will bring me closer to understanding.

I'm not a super trader; I'm just a normal guy trying to improve like everyone else.
When I first started out I treated every penny like it was my last. I had my losses but they didn't wipe me out. I understood very early on that if I wanted to become a good trader I would have to find efficient ways of mastering risk.

Now some people do this via moving averages, MACD's, support and resistance lines etc. The Macci system is a different way of lowering risk but the question is, do you feel comfortable when experimenting with it? This question will ultimately determine whether you blow your accounts or not. The Macci system is sound but your personality may not be sound for the system.

Furthermore, blowing up a few accounts may not bring you any closer to understanding. One thing that may guarantee understanding is if your family was depending on you to succeed.

I’m from Manchester and I warn you, no weather jokes!

Naeem

 

[pedro01]

Naeem - I should have mentioned I was talking about blowing up a couple of 100K DEMO accounts !! I hope not to even do that to be honest.

There's no real money on the line right now.

As for Manchester - it's a much improved city in my opinion & right now it's rainy season in Thailand so you have relatively less rain right now !

BTW - Tradestation is now becoming a real pain. For the past 2 nights, radar screen has simply been refusing to update.

Strange how the moment I setup a demo account, it starts giving me problems even though I have far less going on on the 2 screens right now.

I had a guy in today that upgraded my RAM from 1gb to 3gb. If that doesn't help, then I'll talk to Tradestation about it.