[[ Trend Following Strategies ]] Forex MACD Strategy

[[ Trend Following Strategies ]] Forex MACD Strategy


Thank you for reading this forex macd strategy blogpost and I’m sure that you’ll learn a lot from this short to the point post.

As you all may know, mastering MACD required a little bit or more of learning curve and many tutorials you found out there is not easy to understand and as a result, left in confusion.

I admit that MACD is one of those powerful indicators that has provided in almost every single trading platform out there. Look, I can guarantee that you’ll be able to boost your trading performance once you implemented the power of MACD.

In this post, you’ll learn best strategy on how to dominate forex market with MACD. The best thing is after reading this report, you should be able to implement the MACD strategies to your trading plan or system quickly.

First, I give you an overview and how to use the methods. Second, I will show you an example of how to analyze the market with these methods.

***Tips: Don’t rely on this single indicator to analyze the market. Make sure to combine other technical analysis (or e.g. candlestick, Fibonacci etc) to analyze the market movement to filter any false trade or to maximum

*** Here are the words that might causes you confuse but eventually the meaning is the same:

– Bullish = Buying

– Bearish = Selling

– Strategy = Method


The Forex MACD Strategy Method:

forex-macd-1

This strategy is really famous for MACD indicator. The strategy can be confusing for most traders.

Here is an overview how effective is Divergence:

Short Term: Scalper-Intraday

  • Many signal generated

  • Short profit

  • Accurate

Long Term: Swing Trader

  • Few Signal Generated

  • High profit

  • Very Accurate

*** The divergence strategy is indeed accurate and even more accurate if you’re trading for long term.

Leave the MACD setting to default (in case if you’re using metatrader) if not, use this

forex-macd-2

We are going to use the MACD histogram to use this strategy. The histogram calculates the momentum and obviously, it responds to the speed of the price movement.

When will we be going to use this divergence strategy?

A: We’re going to use the strategy to detect the sign of market reversal. The signal is very early– I really mean it!

You can see the signal before the reversal happening and imagine if you’re trading for the long-term….grabbing 100-1000 pips is never been easier!

There are two types of divergence:

1) Positive Divergence – for bullish/buying market signal

2) Negative Divergence – for bearish/selling market signal

Positive Divergence ( bullish reversal )

  • When MACD produces higher lows whilst the price makes lower low.

See example below:

forex-macd-3

  • Notice the difference between the direction of the price and MACD.

As a result of the positive divergence signal, the price rapidly moving up and guess what? 1000 pip profit is what you see here in this chart after the reversal.

Negative Divergence ( bearish reversal )

  • The opposite of positive divergence

  • When MACD produces lower highs whilst the price makes higher highs

See example below:

forex-macd-4

  • Notice the difference between the direction of the MACD and the price

  • The MACD shows a very early signal so the price apparently about to reverse but it consolidate before doing so.

  • After a 5-12 candlestick, the market reverse massively to the downside.

Tips for divergence method

  • The MACD divergence shows an early signal but it doesn’t mean it going to reverse next candle, it probably reverse next 10 or more candlesticks before the price going to make its move.

  • That’s why to make sure always use the combination of other technical analysis before entering a trade for further confirmation.

More Divergence example trades:

  • (1) Eur/Usd , 4-hour timeframe – positive divergence

forex-macd-5

  • A positive divergence signal shows above creates a reversal of Eur/Usd pair from bearish to bullish. Near the horizontal line, there is a candlestick pattern called hammer that confirm the reversal.( another extra tips)

  • (2) Aud/Usd, 15 min timeframe – negative divergence

forex-macd-6

  • Negative divergence on 15 min chart timeframe creates a sell reversal.

  • (3) Aud/Usd, 15 min timeframe – Another negative divergence

forex-macd-7

  • Another negative divergence from Aud/Usd pair with the same timeframe.

  • (4) EUR/JPY, Daily timeframe –Positive Divergence

forex-macd-8

  • A massive results of positive divergence signal as predicted. Remember the higher the timeframe the higher and killer profits you can make.

The Forex MACD Strategy Method In A Nutshell:

So, here is a basic outline of what you’ll be doing with this method:

  1. Divergence, 1) Positive divergence 2) Negative Divergence

  1. Positive divergence = bullish or buy reversal signal

  1. Negative divergence = bearish or sell reversal signal

I hope you enjoyed reading this short, simple post on an easy way to make a killing of MACD indicator. I wish you the best success as a trader! Do share and comment if you like this!


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