MACD strategy

I ran a back test for you. Positions are closed when the MACD crosses back over the Signal. I've assumed a 1 point spread and given you £2000 initial captial. The system only takes trades between 0700 and 1000. Hope this helps.

So the success rate is "33%", eh? I'm sure I've come across that number elsewhere...;)

You didn't post anything suggesting the strategy could work with adjustments but anyways...

OK, so now I guess I need to backtest with trading software, which everyone has told me doesn't work.

Many people have said a few hundred trades of testing won't work.

So I guess that's it, forget it, go back to the day job, I'm too dim for this, but then perhaps I'm dim for expecting helpful sincere responses. A cynic might even suggest sucking in the retail trading schmucks is all part of Mammon's game...

So what next? Paying someone to help me develop a strategy?
 
dude, your up against math phd prodigy's and there sophisticated algos...

did you really think a shopworn out-of-the-box macd would work?

you have a LOT of work ahead of you. put in some screen time newb..:confused:

the best indicator is right b/w your ears
 
. . .but then perhaps I'm dim for expecting helpful sincere responses.
asimpleplan,
As far as I can see, all of the responses you've received have been sincere - mine certainly are. The problem is that no one is telling you what you want to hear. But hey, you don't have to listen to us - or anywhere else for that matter. Test your ideas and, if they work, then as cbrads says, go for it! Make a tonne of money using MACD and come back here and tell us all how you did it. I'll be first in line to congratulate you.
Tim.
 
"The problem is that no one is telling you what you want to hear."

Maybe you're right. I'm trying to convince myself frustration is part of the learning curve.

It helps if you're given the right information from the start though...

So should I go and throw money at backtesting software? There doesn't seem to be much agreement on this issue judging from a thread I started a while back though cbrads with his 33% success rate seems to think it's enough confirmation.
 
backtesting soft is only as good as your ability to define your conditions.

its the implicit assumptions, those you aren't aware of and haven't been plugged in that can rear up and skew!
 
I understand the fundamentals are what drive the market but it's easier for me to interpret a chart than listen to Yellen. At least that's what I used to think..

When I first started reading about trading, I tried to only focus on charts, price action and indicators and sought to develop strategies based solely on those so as to take the emotion and second guessing out of the picture; my point is one'd go crazy trying to keep up with every single news announcement that'd impact the charts.

Anyway, it's a learning curve..

If you are going to ignore the fundamentals then you are wasting your time. The chances of you finding a system that can extract profit when the variables that move the market is absent from your strategy is slim at best. It's like driving while blindfolded. Anyways, you probably don't want to hear this and likely going to ignore it. This won't end well for you I'm afraid. I don't want to sound pessimistic but it's true. Good luck anyway and hopefully you can prove me wrong.
 
If you'd like to back test some of your own ideas one of the most economical ways would be to open an account with IG and sign up for their prorealtime software package. It's free as long as you place 4 trades a month. I'm not sure what significance you're attaching to the 33% win rate - it's just a number calculated thus:

(Winning trades / Total number of trades)*100

(397/1201)*100 = 33.05578%

I've attached the code so you can back test it yourself
 

Attachments

  • GBPUSDMACDx3.png
    GBPUSDMACDx3.png
    92.8 KB · Views: 290
Or use forex tester. I received an email this week than version 3 is out. You can build a fully customised backtest on it
 
i don't think we have to plug in a stock macd to know that it won't work, for fcks sake
 
mcad strategy?

buying/selling simple minded crosses doent even rise to the level of a thought let alone a strategy/method

absurd
 
Hi asimpleplan,
"The problem is that no one is telling you what you want to hear."

Maybe you're right. I'm trying to convince myself frustration is part of the learning curve..
With one notable exception, trading is by far and away the hardest and most frustrating thing I've ever attempted to do. It's second only to trying to understand the way my wife's mind works. Frustration for novice traders - and a good many seasoned ones too - goes with the territory.

"It helps if you're given the right information from the start though....
This implies that you think you've been given information that's wrong?

It's important to understand that trading is a unique human endeavour because, at it's heart, lies disagreement. In other words, for every buyer there is a seller. So market participants have very different views about what's happening now and what may happen in the future. There are few areas of consensus upon which everyone agrees. This is a necessary feature of the markets for them to function effectively. Keep in mind that you're not learning to be a doctor or a mechanic where there are standard procedures for diagnosing an illness or a fault in a car. This is reflected in forums like this where views will vary from one member to the next. Ultimately, you have discover your own truth about the markets and work out what's valid for you. So, my advice is to assume that anything you read about trading is prefixed with 'in my opinion'. In trading, the only information or advice that one can claim to be 100% right or 100% wrong is factual stuff, i.e. 'the FTSE100 comprises the top 30 U.K. companies' is just plain wrong. 'MACD is a useless indicator' is an opinion, albeit one that's firmly held by many traders, but not all. Learn to distinguish between fact and opinion.

"So should I go and throw money at backtesting software? There doesn't seem to be much agreement on this issue judging from a thread I started a while back though cbrads with his 33% success rate seems to think it's enough confirmation.
As has been explained, you don't need to spend a cent on backtesting software. However, you will have to invest time and effort in learning how to use it. There are very few quick fix cookie cutter solutions in this game. It takes a lot of time and hard work, laced with bucket loads of frustration along the way.

The backtest that cbrads kindly spent time and effort doing on your behalf tells you that with the parameters used it only 'works' 33% of the time. So, if you wish to pursue using the MACD indicator, you can either look at increasing the success rate or, flip it on its head - and use a filter to try and reduce the 66% losing trades. One relatively simple way to do that is to only trade with the prevailing trend. If this idea appeals - and trading with the trend is one piece of advice that almost everyone will recommend you do to start with - then your next task is to define what the prevailing trend is. There are no standard ways of doing this; what one trader uses will not suit the next trader. That said, a good starting point is to pan out and look at what's happening in a larger timeframe. So, if you're trading an M5 chart, determine the trend on, say a M30 chart. As you like Heikin-Ashi, you could try only taking trades signalled by MACD on the condition that they're in the same direction as the previously completed ('printed') M30 candle. So, if the last printed candle is green - only take long trades: if it's red, only take short trades. That ought to reduce the number of losing trades. Whether or not it does so sufficiently to base a strategy on - I've no idea. You'll have to invest your own time and effort in testing it to find out.
Tim.
 
I always get a chuckle when I read about 'lagging' indicators.

Why dont you turn your lagging MACD indicator into a Leading MACD indicator. You can do the same with your Heiken Ashi candles. In fact, the approach works most indicators, the more laggy the betterer.

6099-darktone-albums-general-3-picture4192-buy-thankyou.jpg
 
All sorts of folks in the market.

You got the Smart guys, doing everything by the book :smart:
What patiently for the setup
Add to winners
Use stops


6099-darktone-albums-general-3-picture4194-smart.jpg



And you got the other wonkers :cheesy:

6099-darktone-albums-general-3-picture4196-couldnt-give-ffffffff.jpg


Who ya wanna be :p
 
darkie, where there are large swings to & fro .... but when in consolidation that macd or any other indicator that lags rather than leads price will chop into little bits. same goes where especially long trending wave...that macd will give false signals all way up or down. by time realize what just happened...POOF all profit is gone:cry::cry::cry:
 
The key takeaway here is trading on indicator signals alone will not give any ability to filter out congestion. You can only do that by following the fundamentals.
 
Top