MACD breakouts - a unique strategy full of great opportunities
MACD, together with moving averages, are among the most used trading indicators and it is no wonder that traders themselves have invented literally countless ways to use these unique indicators in practice.
There are really a lot of uses, but the one we are going to share here today is very unique, as it can be used not only by long-term traders, but also by short-term speculators who can make a real fortune with it.
Strategy entry rules
Entering long positions
1) the market is trending upwards
2) the MACD line leaves the MACD zone "at the bottom"
Entry into short positions
1) the market shows a downward trend
2) the MACD line leaves the MACD band "near the top"
How to trade with the strategy
One of the most basic needs leading to success is that a trader must learn to be relatively good at determining the current market trend setup (a very subjective matter that must be mastered). However, it does not matter whether he uses trend lines, moving averages or other tools, the main thing is that he can correctly identify the trend with a high probability. If the trader can already do this, then everything else is, so to speak, a walk in the park, since all he has to do is insert the MACD indicator, set it up (see the picture above) and then just wait until the entry conditions are met.
If the current trend situation is rising, then we only enter long trades and only when the MACD line leaves the MACD band (below the zero value - see chart below - the first three blue ellipses from the left). By analogy, the opposite then occurs when entering short trades in the case of a downtrend and the MACD line leaks above the zero value (see below - the other blue ellipses).
With today's system, it is possible to achieve a success rate of over 60%, and since this is a particularly counter-trend strategy, the best results will of course always be achieved in markets that are relatively more trending and less oscillating.