Originally posted by Bogdan G on bots.com school. Click here
for the full review.
Why the MACD Range doesn’t suck?
Identifying a range bound market as soon as it begins is difficult even for an experienced trader and although this method is not bullet proof, it can give us a heads up about the possible beginning of the ranging period. Also it allows us to trade in several ways, using Boundary options, normal Calls and Puts and a potential breakout once the histogram leaves the range zone.
Wrapping it up
Even if it’s not a sure thing (nothing is in trading), this method of identifying a market that moves sideways by using the MACD histogram is definitely an extra help and I’ll take almost any free help that I receive. The histogram will move outside the levels many times during a trading session, but once we see it remaining inside the zone for a longer time, we can start to look for other hints that indicate a range bound market. One thing is certain: while the histogram is hovering around the zero level, the volume is low and price is not going anywhere. Overall it’s a good tool to have but don’t expect it to work some magic and fill your accounts.