Optimizing MACD-Stochastic Setting to Boost Your Profit

The Moving Average Convergence Divergence (MACD) is a fundamentally flawless tools/indicator and extremely basic to identify changes in determining the support-resistance. Aside from this, MACD additionally perceived as less flawless considering the lagging reaction. This is the motivation behind why a significant number of traders include different instruments in their framework to tune up their gains. One tool that usually included is Stochastic oscillator (SO). By joining both SO and MACD, it is feasible for someone to acquire better decision making a supportive system that is progressively proficient, dependable and presenting a few difficulties to elucidate.

 

The system underneath is disclosing how to join MACD and Stochastic to enable your trading gains to a higher level:

 

The MA Convergence Divergence (MACD) Setting

The MACD is an indicator/tool that consists of two moving lines that measure the currency pair price momentum. The momentum itself is clarified as the elements of support (it doesn’t mind in the event that you don’t get it. Our goal is to get the setting, right?). The two bends are actually lines delineating exponential MA (the default setting is 12 and 26 sessions). Their gaps as well as the cross of two lines—primary and signal—can foresee changes in course of support-resistance. The momentum begins when the gap between the two bends is expanding, as it were the energy increments and affirms the trend/pattern. At the point when the bends shrink and afterward cross one another, the force is decreased and a change of trend is suggested.

To make it simpler to peruse these errors, it is conceivable to utilize an outline that appears as a solitary line: the MACD oscillator. It communicates the contrasts between two main-signal lines by subtracting the 26-last-candlestick MA to 12-last-candlestick MA. This is usually called convergence-divergence. The 9- last-candlestick EMA is sometimes included as flag line, and each time the oscillator line crosses over that 9-period EMA, it is considered as long position. For selling position, it works vice versa.

 

The Stochastic Oscillator (SO) Setting

SO is an indicator/tool that analyzes the price of a determined time to its pattern (high-low price) over various periods. It has been viewed as evidence that in case of an uptrend, the closing is close to their highest price, while on a downtrend, it close for the most part nearer to their lowest. A signal is given at whatever point %K of the SO crosses %D—a moving average of three periods of %K.

Definitely, the formula takes the form of a curve, framed by two limits. The upper limit—commonly used level is—80% or more above this, the price is believed as overbought and therefore likely falling. In an inverse way as to a lower limit, 20% and beneath, currency price looks attentively oversold and so is likely to climb up.

 

Using MACD-SO Double-Crossover to Maximize Your Profit
A bullish-starting MACD corresponds to a bend that goes above the mid-line (usually depicted as green histograms) and a bullish-starting SO is the point at which the %K goes over the %D (blue part of the graph—this color might be different among platforms). The mix of the two tools/indicators, in other words, the “Double-Crossover” strategy is a powerful tool of price raising. In addition, for the downtrend, the rule goes in the opposite way. The perfect timing for opening position is when the histogram of MACD passes the mid-line a bit after the Stochastic. This can be considered an affirmation. Otherwise, it is a high opportunity to the move to create a bogus caution.
This Double-Crossover procedure allows people to improve a better market/order position even when in trending or reversal situation. Nonetheless, traders need to find a blend of times to consider. The MACD dependably give a late flag contrasted with stochastic. Once, it acts as confirmation of stochastic while in other time traders might be late to enter the market. Especially when the sideways condition happens.

Feeling Trading, Trade Your Feeling, Feel Your Profit

Starting today I will upload articles about predictions of currency movements. Each article contains predictions based on technical readings of certain currencies. Each article will be included in the “Feeling Trading” series.

Maybe people will ask a lot, why am I trading based on a feeling? Previously I need to emphasize here that what I say with feeling trading is actually not really doing currency buying/selling transactions based solely on feeling. Instead, I use several technical indicators to analyze and make decisions.

What indicators do I use to analyze currency movements before I trade? The first and foremost is the stochastic oscillator. I am a big fan of the stochastic indicator, the indicator found by Dr. George Lane in the late of 1950s. This indicator, in my opinion, is a very reliable indicator and can be used to determine the limit of price movements in a trend. In fact, with a few proper modifications, this indicator can be used to determine entry and exit positions in both short, medium and long trends.

The second indicator that I use is the Moving Average. Indeed, this indicator should be the first indicator that must be added to my list. This indicator can show us the current trend. For traders who like to follow the trend, this indicator is very useful. However, because it is always late in following price movements, I put this indicator in the second number on my list. I use this indicator solely to see what the trend is happening now. However, as a retail trader with not too large equity, the best for us is not to fight the current trend.

The third indicator that I have never left in each of my trades is Fibonacci Retracement. After the Stochastic Oscillator, this is my number two favorite indicator. I get many benefits when determining which price points I should use as an entry position and profit target. (Note: I never use Stop Loss. Sounds absurd, yes to some traders? But next time I will explain why I don’t like using SL). Fibonacci retracement is known for its effectiveness in determining price support and resistance levels on a trend.

The last indicator I use is the Camarilla Pivot and Support / Resistance. This indicator is a cost indicator that is not a default indicator — which is included with the MetaTrader installation. This indicator is just an additional indicator. I added this indicator after some time using (only) three other indicators that I explained earlier. Camarilla Pivot (I call it so to shorten), I only use it to recognize extreme support and resistance levels which are sometimes difficult to estimate by using a Fibonacci retracement – especially when prices move very wide and exceed the daily range of the currency.

In the end, this is actually not merely trading with feeling like gambling. Conversely, this is technical trading which is also not merely technical as a robot. This is technical trading that uses certain considerations so that any indications that are read on the graph do not necessarily translate raw.

How is the performance? So far so good in my opinion. With an income of no less than 2% every day, it feels enough to support me and my family. Greetings!