4 Hour MACD Forex Strategy

4 Hour MACD Forex Strategy

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This trading strategy focuses on finding patterns (for e.g. double top and head and shoulders) on the MACD indicator. Trading patterns off the indicator instead of price reminds me of the Woodies CCI.

(Learn: Trading with MACD)

This trading strategy uses five moving averages as support and resistance points. Set them up:

365 exponential moving average (EMA)

200 simple moving average (SMA)

89 SMA

21 EMA

8 EMA

We are not forgetting the namesake of this trading strategy. The settings for MACD are:

5 for fast EMA

13 for slow EMA

1 for the signal line

Add horizontal lines at +0.0015, +0.003, +0.0045, -0.0015, -0.003, and -0.0045

RULES FOR 4-HOUR MACD FOREX TRADING STRATEGY

This MACD forex trading strategy has many possible setups. Philip Nel recommended trend continuation setups for beginners. I interpreted the strategy and came up with the following trading rules to trade continuations. These rules side-stepped the need to look for chart patterns.

LONG TRADE

Price is above 89 EMA

MACD is above zero

MACD falls

Buy once MACD rises (if MACD is still above zero)

SHORT TRADE

Price is below 89 EMA

MACD is below zero

MACD rises

Sell once MACD falls (if MACD is still below zero)

4-HOUR MACD FOREX TRADING EXAMPLES

About Author:Galen Woods

4 Hour MACD Forex Strategy By Galen Woods in Trading Setups on 21 January 2014 Read more about MACD, Momentum, Forex Trading Philip Nel started a thread at ForexFactory forum discussing the 4-hour MACD Forex Trading Strategy. It is an impressive forum thread. It began in 2007 and it is still active now. (It has 1338 pages and growing.)