I am a forex beginner. Which is the most accurate of MACD in forex trading?
November 29th, 2009
ibrahim a asked:
I am a forex beginner. I’ve been trying different indicators to help me profit from forex trading, but most are complicated and difficult to understand. I am glad if someone out there can help me with something easy and reliable.
Categories: Investing | Tags: Forex Trading, Macd
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first, you have to understand there is nothing easy and reliable. and if there is, only a small group of people know. if everybody knows the market will adjust so nobody can profit from that trick anymore.
as for your main question, many chartist use 6 day and 12 day MACD as part of their indicators. they may buy when 6 day crosses 12 day on the low and sell on the high.
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No indicator will work on it’s own, you have to combine them with others to build a complete trading system. I suggest to learn more about trendlines, candlestick patterns and the different technical indicators and what they can do for you. Or you could invest some money in a trading system to get you started. The choice is up to you.
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MACD doesn’t really work anymore, at least in the currency I trade, read the wiki article below (re: ‘whipsaw’). As far as I can tell stochastic (5, 3, 3) is more important, but yet again, that will depend on the currency you are trading.
Consider yourself very good if you get 50% of your trades correct. Pick 2-3 indicators that you feel comfortable with. The most important part of FX trading is “Position Sizing” and “Money Management” (keep your win/loss ratio to at least 2/1,better 3/1). ie., you make $200 for every winning trade & $100 for every losing trade. Best bet, take the next year and read 8-12 books on FX trading.
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I like the MACD (Hist. +2 lines) using the fast momentum line as the trend indicator.
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Go here:
Some very good resources there. Good luck.