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  1. #1
    Administrator Martin Kay's Avatar

    Hot MACD Divergence Strategy – Zooming in to 15 Minutes !!!

    Hi, guys!

    Michael presents another great strategy review. This time it is concerning “MACD Divergence Strategy”, a simple and very effective MACD based trading strategy. Share your views here on this strategy! What do you think on it? Is it good or not good for trading binary options?


    Originally Posted by Michael Hodges.

    This is a strategy I found while surfing the web and one I can fully stand behind. This is a great application of a standard MACD signal and easy to apply to binary options. First, for those of you new to trading, MACD is a technical indicator used to measure market momentum. It measures the convergence and divergence of two moving averages, hence the name; Moving Average Convergence Divergence. It is an oscillator that can be displayed in two ways, standard and histogram. The standard view looks a lot like other oscillators including stochastic and RSI. It has two lines that move above and below each other and in between two extremes. The histogram is a pictographic view of the convergence and divergence of the two lines. Both views offer deep insight into market momentum but this strategy focuses on the histogram view.

  2. #2
    Specialist Member runneroption's Avatar
    Nice article and well written. I also have some lucky tricks when trading but I don’t consider them serious, cause I know exactly what is the key to my profits and what is just a psychological helping tips.

  3. #3
    Master Member Bogdan G's Avatar
    Quote Originally Posted by runneroption View Post
    ...cause I know exactly what is the key to my profits...
    Share with us maybe?

  4. #4
    Specialist Member runneroption's Avatar
    Haha thanks for asking Bogdan but my strategy is too complex to share in a few words. Besides my strategy rules I have few psychological moments which I always follow - like never trading when I am angry or too ecstatic, never trade when I drink alcohol and never trade when I have some important tasks to do, which will distract me from proper trading decision. Also I never place trades in first our after I started to work on my PC and never place trades at last hour at the evening before going away. This helps me a lot, there is no pure explanation why these tips works but they help me a lot during last few months active trading.

  5. #5
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    entry and exits are “fuzzy”
    True about this strategy. I agree with suggestion of adding more indicators to it.

    .........................there is no pure explanation why these tips works but they help me a lot during last few months active trading
    There is pretty good explanation of why u shouldnt trade when angry, ecstatic, drinking, in a hurry, sleepy or anything which has significant impact on ur thinking abilities. These are pretty general rules but not followed by many even though following these rules makes a lot of difference in trading results and u have observed it.

  6. #6
    Legendry Member Michael Hodges's Avatar
    I like MACD. It works, its adaptable.

  7. #7
    Master Member Bogdan G's Avatar
    Dont we have to compare Price Highs with Indicator Highs and Price Lows with Indicator Lows? If I remember correctly - and I do - that's one of the first and most important rules of identifying Divergence. The pics in the article show a comparison between Price Highs and Indicator Lows.
    This is the correct way in my opinion: http://www.binaryoptionsthatsuck.com...inuation-tool/

  8. #8
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by Bogdan G View Post
    Dont we have to compare Price Highs with Indicator Highs and Price Lows with Indicator Lows? If I remember correctly - and I do - that's one of the first and most important rules of identifying Divergence. The pics in the article show a comparison between Price Highs and Indicator Lows.
    This is the correct way in my opinion: http://www.binaryoptionsthatsuck.com...inuation-tool/
    If you look at the chart picture you can see that as prices are moving lower the bearish MACD is receding, it is not really a peak but just a diminishing of bearish momentum. This is an OK signal but not a great one, I prefer to analyze actual peaks, for instance if prices make two lower lows with lower highs in between and then MACD makes two bearish peaks with the second smaller than the first I would consider that to be a better signal.

  9. #9
    Master Member Bogdan G's Avatar
    There is definitely divergence there, but the picture does not show it or rather shows it wrong. I know it's not your picture so I'm not saying you drew it wrong.

  10. #10
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by Bogdan G View Post
    There is definitely divergence there, but the picture does not show it or rather shows it wrong. I know it's not your picture so I'm not saying you drew it wrong.
    Yeah, I know. I don't think this is a strong divergence. I think this trader is trading on snap backs during a rally/bear market rather than identifying support/resistnace areas for bounces and reversals.

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