Saturday, August 2, 2014

Some notes on McGinley MACD

I have been on a long Hiatus. I had to put Blogging on the backburner due to preoccupation with so many other activities.  I am slowly getting back to my passion, experimenting with TA. Hopefully I would be able to share a lot more with all readers of this blog.
First some notes on the McGinley MACD.  A friend Anant Navale wrote to me on the McGinley MACD. Anant is a expert trader and experiments a lot on different trading systems.  Quoting from Anant
I have tested it along with the McGinley MACD and could get some useful combination. What I found is this:

1) McGinley period = 10
2) McGinley MACD Histogram with standard parameters (12,26,9)

The Strategy for Trading:

Let us say, candle No. 1 crosses over the McGinley line from below and closes above the McGinley line. This indicates a probable Buy signal. If the next candle (Candle No. 2) closes above the High of the Candle No. 1 AND the McGinley MACD Histogram for Candle No. 2 is positive then the Buy is confirmed. Entry can be taken.

For the Sell (or Short) condition the sequence is reverse: Candle 1 crosses McGinley from above and closes below, Candle No. 2 closes below the low of candle No. 1 AND  the McGinley MACD Histogram for Candle No. 2 is negative then the Sell (or Short entry) is confirmed. Entry can be taken.

The MACD value for candle No. 1 is not important in both cases. It can be positive or negative or even zero. Only for candle No. 2 it is relevant.

Even with the above conditions there will be some whipsaws but that is apart of any strategy using indicators.

Hope we will hear more from Anant on further improvement on the McGinley MACD.  He is very active on popular forums like Traderji and Inditrader.  If anybody else has done some work on the McGinley MACD please share here.

I will be back soon something new……. Adios Amigo till then ….