Trading strategy MACD Professional FOREX

The gist of the strategy

A positional trend strategy based on the Moving Averages Convergence-Divergence (MACD), exponential moving average (EMA), and the Parabolic SAR. Their combination helps you efficiently analyze the current trend, spot its reversal in time, and see the whole picture of the price chart for the near term.

 

The strategy is used in daily time frames, but it can also be used in small time frames, e.g., hourly.

Getting ready to trade

Open the platform. On the Indicators menu, select MACD and keep the default settings. Then select the Parabolic indicator in the same menu. Then put the EMA with a period of 9 on the chart.

 

After each tool we need is set up, start analyzing the market situation. To determine when to open a trade on the trend, wait for the simultaneous appearance of three signals: the intersection of MACD lines, the appearance of the Parabolic SAR point above or below the chart, and the breakthrough of the exponential moving average (EMA) by the price chart.

Open a "Buy" trade.

  1. The MACD line (fast line) crosses the signal line (slow line) bottom up, the Parabolic point appears under the chart, and the price chart breaks through the EMA bottom up.

 

  1. Open a "Buy" trade.

Close the trade when any of these indicators sends the opposite signal. For example, the Parabolic point appears above the chart, the MACD line crosses the signal line top down, or the price chart breaks through the EMA top down.

Open a "Sell" trade

  1. The MACD fast line crosses the signal line top down, the Parabolic point appears below the price chart, and the price chart breaks through the EMA-9 top down.

 

  1. Open a "Sell" trade

Close the trade when any of these indicators sends the opposite signal. For example, the Parabolic point appears below the chart, the MACD line crosses the signal line bottom up, or the price chart breaks through the EMA bottom up.

Keep in mind

This is a trend strategy, so it can't be used in a sideways (or flat) trend.

 

One of the ways to identify a trend in this strategy are Bollinger Bands. If the Bollinger Bands are headed down or are reversing down, the trend is descending: This is a good opportunity to open a down trade. If the Bollinger Bands are headed up or reversing up, the trend is ascending, so it's better to make an up trade. If the Bollinger Bands are headed sideways, you have a sideways trend (flat), so the strategy should not be used.