Many trading strategies exist. You can choose one in accordance with your skills and preferences. But you have to start by getting to know different strategies. Then you will be able to make a better choice. So let me show you a trading strategy that is called the MACD Professional Strategy.
Key Takeaways🔑
| →MACD Professional Strategy uses three key indicators: EMA, Parabolic SAR, and MACD. |
| →This strategy is best suited for trending markets and uses a 1-hour chart timeframe. |
| →Always ensure all three indicators give a valid signal before entering a trade. |
Contents
Preparations for trading with the MACD Professional Strategy
The MACD Professional Strategy is based on 3 indicators. Exponential Moving Average, Parabolic SAR and Moving Average Convergence Divergence. You will have to add each indicator to the chart. Leave their settings as default.
The EMA is one of the types of moving average. It will plot over the price.
The PSAR is displayed in a form of coloured dots that develop above or below the candles. They show the current price direction and its change. Moreover, they show the strength of the trend. The further the dots from the price, the stronger the trend. You may expect a change of the price direction when the dots are approaching the candlesticks. A long transaction can be opened when the dot appears below the price. A signal to open a short trade occurs when the first dot develops above the candles.
The MACD will appear in a separate window beneath the price chart. It consists of two lines. One is known as the MACD Line and the other as the Signal Line. Their crossovers produce trading signals. When the Signal Line crosses the MACD Line from below, you can open a long transaction. When the MACD Line crosses the Signal Line from above, it gives a signal to open a short trade.
Using the MACD Professional Strategy on Olymp Trade
First, log in to your Olymp Trade trading account. Choose the asset. Set the timeframe for the chart for 1 hour. Attach the indicators that are the EMA, Parabolic SAR and MACD. Decide on the trading amount and set the trade duration for 2 to 3 hours.
Opening an UP trade
To open a position for the price increase using the MACD Pro Strategy, you should wait for a few conditions to be met.
- The price crosses the EMA on its way up.
- The dot of the Parabolic Sar appears below the price.
- The Signal Line crosses the MACD Line from below and continues above it.
Opening a DOWN trade
To open a transaction for the price decrease, wait for signals from all three indicators.
- The price should cut the EMA down.
- The first dot of the PSAR appears above the price.
- The MACD Line crosses the Signal Line from above.
Pros and Cons of MACD Professional Strategy 👍👎
- 👍Utilizes proven technical analysis indicators
- 👍Offers clear entry signals when all conditions are met
- 👎Requires constant monitoring of charts
- 👎Not effective in range-bound markets
| Indicator | Role in MACD Pro Strategy |
|---|---|
| Exponential Moving Average (EMA) | Indicates the price direction |
| Parabolic SAR (PSAR) | Shows the current price direction and its change |
| Moving Average Convergence Divergence (MACD) | Gives trading signals based on MACD and Signal line crossovers |
Final words
The MACD Professional Strategy is based on 3 different indicators. The EMA, Parabolic SAR and MACD. It works only when there is a visible trend in the market. Use a 1-hour chart timeframe and hold the position open for 2 or 3 hours.
To enter the trade you have to wait for the signal. All three indicators are important. Observe the chart and check whether the signal is valid.
Train using the MACD Pro Strategy in the Olymp Trade demo account. Once you are able to catch the signal to open a trading position, move to the live account and generate some profit.
Wish you high earnings!
Q&A 🙋♂️
- Q: Can MACD Pro Strategy be used for all timeframes?
- A: It’s generally recommended for use with a 1-hour chart timeframe.
- Q: What type of market is best for this strategy?
- A: This strategy performs best in trending markets.
- Q: Can I use this strategy with any asset?
- A: Yes, you can use it with any asset, but it’s best to first test it with different assets in a demo account.
- Q: What if only two indicators provide a valid signal?
- A: For best results, wait until all three indicators provide a valid signal.
- Q: How long should I hold the position open?
- A: It’s recommended to hold the position open for 2 to 3 hours.