I Found Macd Signal Sloping Upward.when Stock Price Was Making A New Low..and I Trade In To Long Position..but My Expectaions Were Not Matterelised..is Macd Signal Sloping Upside Is Conclusive That Price Of Stock Is Going To Rise.i Want To Mention That I Was In To Intraday Trading..i M Really Novice Can Anyone Guide Me?
Trading off indicator signals is notoriously inaccurate. The current indicator values themselves are sometimes irrelevant and just reflect the indicator adjusting to past data from the price. In addition, indicators like MA, MACD etc. usually lag behind price because they can only be correct once the most recent price has been added into their calculation. They don't tell you what will happen, only what has happened.
Price is the key to trading decisions. MAs can be useful to confirm trend strength and direction, so can MACD, so you might use these to decide how large your position should be or to confirm your decision to enter. But it is impossible to be consistently successful using a simple rule such as 'buy when MACD crossover occurs below the 50% line'.
Price is the key to trading decisions. MAs can be useful to confirm trend strength and direction, so can MACD, so you might use these to decide how large your position should be or to confirm your decision to enter. But it is impossible to be consistently successful using a simple rule such as 'buy when MACD crossover occurs below the 50% line'.
It seems you were trying to trade a divergence signal. Divergence works but there is a knack to trading it. I find traders often confuse diverging and divergence. An idicator can be diverging but that does not in itself give you divergence. IF the price keeps dropping your indicator will no longer be diverging and when you "back test" you will NEVER pick these divergence signals up, because there was no divergence.
I find the best divergence plays to make are when the indicator has turned.
EG. MACD line was pointing up and the price was making a new low, wait for the MACD to turn over and give you a point. From that point you can see if divergence has taken place. Will throw up a chart to explain these ramblings, but need to dash out.
gamma
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I am a great disciple of macd and rsi as confirmation.
If you use fibs as predictive indicators and mark the prices that coincide with fibs extensions retracements you will find that the macd and rsi will give you a signal as overbought and oversold points are generally clustered around fibs points add your pivot points and support and resistance lines and you have a good indication of whether the trade is a viable one or not.
Using the MACD as a sole indicator is not advised.notably as it is a backward looking indicator
and these are really only good for confirmation.
Would also like to say that I only trade forex so not sure about stocks or indices but try the principle above on forex and see how you go.
If you use fibs as predictive indicators and mark the prices that coincide with fibs extensions retracements you will find that the macd and rsi will give you a signal as overbought and oversold points are generally clustered around fibs points add your pivot points and support and resistance lines and you have a good indication of whether the trade is a viable one or not.
Using the MACD as a sole indicator is not advised.notably as it is a backward looking indicator
and these are really only good for confirmation.
Would also like to say that I only trade forex so not sure about stocks or indices but try the principle above on forex and see how you go.
gamma
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What I am also trying to say but beter explained by yourself .
Add the pivots, support resistance lines and use the fib extensions retracments to the above and hey presto!
Ah! and just remembered use price action before entering the trade (higher highs, lower lows )
