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    If We Combine The MACD With The Stochastic Indicator

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    MOHD TARMIZI
    The document discusses testing the effectiveness of combining the MACD and Stochastic indicators to generate trading signals. It explains that the MACD indicator on its own has a high win rate, but the author wants to see if adding the Stochastic indicator can improve results further. The author then outlines the rules for the MACD-Stochastic strategy, which involves looking for Stochastic oversold/overbought signals and only taking trades on MACD crossovers that occur after those signals. The author then says they tested this strategy 100 times to see if it worked effectively.

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    If We Combine The MACD With The Stochastic Indicator

    Uploaded by

    MOHD TARMIZI
    136 views1 page
    The document discusses testing the effectiveness of combining the MACD and Stochastic indicators to generate trading signals. It explains that the MACD indicator on its own has a high win rate, but the author wants to see if adding the Stochastic indicator can improve results further. The author then outlines the rules for the MACD-Stochastic strategy, which involves looking for Stochastic oversold/overbought signals and only taking trades on MACD crossovers that occur after those signals. The author then says they tested this strategy 100 times to see if it worked effectively.

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    If we combine the MACD with the Stochastic indicator

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    If we combine the MACD with the Stochastic indicator

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    The document discusses testing the effectiveness of combining the MACD and Stochastic indicators to generate trading signals. It explains that the MACD indicator on its own has a high win rate, but the author wants to see if adding the Stochastic indicator can improve results further. The author then outlines the rules for the MACD-Stochastic strategy, which involves looking for Stochastic oversold/overbought signals and only taking trades on MACD crossovers that occur after those signals. The author then says they tested this strategy 100 times to see if it worked effectively.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    136 views1 page

    If We Combine The MACD With The Stochastic Indicator

    Uploaded by

    MOHD TARMIZI
    The document discusses testing the effectiveness of combining the MACD and Stochastic indicators to generate trading signals. It explains that the MACD indicator on its own has a high win rate, but the author wants to see if adding the Stochastic indicator can improve results further. The author then outlines the rules for the MACD-Stochastic strategy, which involves looking for Stochastic oversold/overbought signals and only taking trades on MACD crossovers that occur after those signals. The author then says they tested this strategy 100 times to see if it worked effectively.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    If we combine the MACD with the Stochastic indicator, will you make more money in trading?

    Does the MACD and Stochastic indicator even work together?

    Well, MACD is one of the best indicators we have tested on the Trading Rush channel. We found
    out that the MACD indicator has a really high win rate when compared with other indicators we
    have tested so far. But can we increase that win rate even more by combining the MACD with
    the Stochastic indicator?

    Now I haven't tested the Stochastic indicator yet, but I have tested the Stochastic RSI trading
    strategy 100 times, and it didn't had a very good win rate. In fact, the win rate it had was even
    worse than the regular RSI trading strategy. But that's Stochastic RSI, not the Stochastic
    indicator. I'm going to test the Stochastic indicator 100 times on its own in the future videos.

    In this video, I'm going to test the MACD and Stochastic trading strategy 100 times to see if it
    works. Now you already know about the MACD strategy so I won't go into detail about it. If you
    don't know about the best MACD trading strategy, check out the first video on this channel. In the
    MACD strategy video, I said buy when the MACD gives a crossover below the zero line, and sell
    when the MACD gives a crossover above the zero line. But in the MACD and Stochastic trading
    strategy that you guys have brought to my attention, long trades are not necessarily taken below
    the zero line, and short signals are not always taken above the zero line.

    In my MACD strategy video, I said to buy below and sell above the zero line because of how the
    MACD is calculated and works. I will explain why zero line of the MACD indicator is so important
    in a future video. In the MACD and Stochastic strategy, the rule that made the MACD strategy so
    successful is broken. Here's how the MACD and Stochastic strategy goes. When the K line of the
    Stochastic indicator, crosses below 20, buy at the bullish MACD crossover. Bullish MACD
    crossover is when the MACD line crosses above the signal line. 

    The crossover doesn't have to be below the zero line. For example, here, first the K line of the
    Stochastic indicator went below 20. When this happens, it means the price is oversold and we
    should look to buy. But we won't buy until we see a bullish MACD crossover after the Stochastic
    oversold signal. Remember, the buy signal is only valid, if the MACD crossover comes after the
    Stochastic oversold signal. Set your stoploss just below the swing low. Similarly, when the K line
    of the Stochastic indicator, crosses above 80, sell at the bearish MACD crossover. Bearish
    MACD crossover is when the MACD line crosses below the signal line. For example, here the K
    line of the Stochastic indicator went above 80. It means that the price is over bought and we
    should look to sell. But we will only sell when a bearish MACD crossover signal is generated after
    the Stochastic over bought signal. Remember that MACD sell signal has to come after the
    Stochastic over bought signal. Set your stoploss just above the swing high. Now this is not a
    trend following strategy. As you already know, on the Trading Rush channel, we trade in the
    direction of the long term trend direction. We can use the 200 period exponential moving average
    to find the trend direction. A long entry signal given by the MACD and Stochastic strategy is only
    valid, when the entry candle is completely above the moving average. Similarly, a short entry
    signal is only valid, when the entry candle is completely below the 200 period moving average.
    So, I tested the MACD and Stochastic trading strategy 100 times, and here's what happened.

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