MACD Trading Strategy also known as MACD Strategy for Stock Trading and Forex Trading Tested 100 Times so you can know the real profit potential and make money in Intraday trading and Swing Trades. Can MACD Crossover Strategy Indicator be profitable. Learn the secrets and how to trade MACD Indicator Strategy with real technical analysis examples in this tutorial guide.
Does MACD trading strategy even work? Are online trading guru’s telling you fake information? I have wasted years testing every trading strategy out there before i found the right one that worked! I’ve created this channel to expose every strategy and show their real probabilities so you don’t have to waste your precious time like i did! I’m not here to sell any kind of online course I’m just here to help you in your Stock trading and Forex trading career. if you find this video helpful consider subscribing to support the channel! In this video i will back-test 100 times a very famous trading strategy called MACD cross over. Yes you heard it right. testing 100 times takes time and will most likely prove if you should risk your hard earned money using this strategy!
For those who are new to trading in late 1970s Gerald Appel created an indicator called MACD! MACD short for moving average convergence divergence is a trading indicator used in technical analysis of stock prices and can be applied on a Stock trading or Forex trading chart. This is what MACD indicator looks like. by default MACD indicator will come with 2 lines! a blue line called MACD and a red line called the signal line! MACD crossover strategy is simple once the MACD line crosses above the signal line it is considered as a buy signal. Furthermore you should only take buy signals that are way below the zero line of the histogram.
but there is a big problem with this trading setup! there is no way to identify a good direction of a trend using MACD indicator alone. To be a profitable trader as a beginner you should always trade in the same direction as the market is trending. So to identify the trend we are going to use 200 period Exponential Moving Average! If the market is above 200 E M A it is considered as an up trend. Remember only buy when the MACD gives a buy signal and the market is in an up trend.
here’s an example of a buy setup. the market is above 200 E M A so it’s an up trend. the MACD is showing a crossover below zero line of the histogram. In this buy setup entry is at the MACD crossover and the stop loss is below the pullback of the trend. your profit target should be more than the risk you are taking on the trade. so if you lose one and win one you will still be in profit. there are different ways to set profit targets. personally i will take 25 percent off the trade when the trade reaches 1 times the risk and will move the stop loss to break even. then i will set a second profit target of 2 times the risk i originally took on the trade. so even if the trade never reaches my second profit target i have already taken 25 percent off the trade in profit and will not lose money.
here are some more buy setups in the same trend. all three were in profit. the third trade is also a winner as the market first went up towards the profit target and then went down. but wait!!! Don’t get excited by seeing these 3 winners in a row. this doesn’t mean the strategy is profitable at all. just because i showed you a hand picked buy setup that had 3 winners doesn’t prove anything. who knows if this strategy will have 5 or 10 losers in a row next. unfortunately many trading youtubers on YouTube will show a hand picked setup like this to earn trust of the viewer to sell them a paid course. they won’t mention what’s the probability of the strategy so you can manage money and not blow up your account. trading is a probability game. if you are not back testing the strategy at least 100 times you will have a difficult time with trading or maybe will never make money. that’s why I’m here! reason why i created this channel is to show you the real probability of any trading strategy out there. By knowing the probability of a trading strategy you can predict how many losers and winners you can have in a row and manage your risk per trade accordingly!
in this next few minutes i will show you how the profit graph looks like after taking 100 trades. and how much is the winning percentage of MACD crossover strategy and how many losers you can expect in a row. i will fast forward the next clip to save your time. the following clip can help you understand how this strategy looks in different market condition so do watch carefully.
Watch till the end to see the WIN RATE of MACD Strategy for Intra day, swing trade and day trading.
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