The basic creationA previous post
Another strategyThe strategy is simple and straightforward and it can be used on any time frame. It does not address exiting trades, for that is largely dependent upon your personal time frame. The charts I use include the 3/10 macd in the sub-chart. The "Slow line" I will refer to is colored white.The "Slow Line" will define your trend. If above the zero-line OR having a positive slope, you're looking to buy dips in the histogram (price). Dips can be defined as a pullback in the histogram from previous readings, and the "dip" would be confirmed by the first move in the opposite direction.
If below the zero-line OR having a negative slope, you're looking to sell peaks in the histogram.
Simple enough, yeah? Or am I making it more complicated with my wordiness?
The chart below should illustrate further. I didn't cherry-pick the chart, I opened my chart analysis and SPY came up automatically so that's what I used. If there are any further questions do feel free to inquire.
2 comments:
David L. Spurr has left a new comment on your post "the 3-10 first cross":
Great Interesting piece. I use TOS for my charts and they have a programming language that allows you to plot indicators you construct. I reworked the MACD indicator with the simple moving averages. Here's the code for anyone using TOS:
declare lower;
input fastLength =3;
input slowLength = 10;
input MACDLength =16;
def fastAvg = simpleMovingAvg(close, length = fastLength);
def slowAvg = simpleMovingAvg(close, length = slowLength);
plot Value = fastAvg - slowAvg;
plot Avg = simpleMovingAvg(Value, length = MACDLength);
plot Diff = value - avg;
diff.AssignValueColor(if diff >= 0 then Color.UPTICK else Color.DOWNTICK);
Diff.SetPaintingStrategy(PaintingStrategy.HISTOGRAM);
plot ZeroLine = 0;
Diff.SetDefaultColor(GetColor(5));
Avg.SetDefaultColor(GetColor(8));
Value.SetDefaultColor(GetColor(1));
ZeroLine.SetDefaultColor(GetColor(0));
Enjoy,
DS
http://displacedema.blogspot.com
I must have accidentally deleted the comment by David of http://displacedema.blogspot.com
so I just pasted the content back in. I am sorry for the mis-click of my mouse finger.
-todd
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