Strategy #2- The MACD V1
Just keep in mind, to understand today’s post, you must be familiar with Candlestick charts, the Moving average strategy, Trends and Indicators. Please read the respective posts if you have missed any before reading today's post any further.
This strategy is my personal favourite. I’ve made my best trades based on this strategy. It’s the easiest trading method ever and is perfect for swing trading! As I already explained, we will use indicators to predict trends. Today, you will learn how we use the MACD indicator.
(MACD stands for Moving Average Convergence Divergence)
I decided to try a different approach for explaining strategies.
Instead of making you read, I decided to do a video recording.
It is a little over 7 minutes long.
Watch it here:
(There’s a link below to download the video in case you have a slow net connection)
I recommend you save this video so you can always watch it later whenever you need to refresh the concept:
Click here to download - High quality.
Click here to download - Low quality.
Or if you want to visit the video on youtube go here:
And here's the Investopedia post:
Like I said at the start, the MACD is one of my favourite indicators, but it is necessary I draw your attention to it’s advantages and disadvantages.
Advantages:
Very Simple.
High accuracy rate.
Works in hourly, daily, weekly and monthly charts.
Works for almost any type of security
Disadvantages:
Long gaps between indicators. Usually indicators that are more accurate are very infrequrent.
Large moves. Once the indicator comes, it shoots up immediately. So if you’re late, you’ve missed it.
Works only in trending markets.
If you noticed the title of the post, I mentioned MACD Version 1. This is because there’s another way of trading the MACD which I’ll explain soon.
I really would like to know if you traders prefer videos uploads over written posts, so let me know from the Contact Section.
In this week's #Spotted update, I will discuss how my trade on TCS based on the MACD went. So come back on Friday.
See you soon!