MACD and EMAs correspondence
Posted: Tue Sep 08, 2009 1:07 amHello Edward,
I tested the MACD (standard default settings: 12, 26 and 9) onto the 5 minutes, one hour and 4 hour EUR/USD charts recently. For all the charts, I use EMAs 10, 25 and 50 and did not use SMAs or hybrids. So far most of the trades are in line with the notes and I am happy with the outcomes.
My observations indicate that the 5 minute chart shows a more noticeable different picture of the crossover corresponding to the candlestick movements (uptrend and downtrend), as compared to the charts of one hour and 4 hour. Although at the MACD crossovers, there are instances where respective candle positions do not correspond to the EMAs (10, 25 and 50) crossover, and vice versa. Theoretically, there should be a correspondence at crossover positions between MACD and the EMAs crossovers.
Could it be the settings of the MACD and EMAs used are incorrect that lead to variable conclusion. If they are, what are your recommendations?
Another occasional occurrence is the exit point takes place sooner than expected with profit < 10 pips and all happened within 15 minutes duration on a 5-minute chart. It is meaningless to exit and close this trade with < 10 pips, and later open another new trade. I would rather allow this trade to move along until the 10 EMA returns and touches 50 EMA to close the trade at higher profit level.
What is your opinion and advice on this?
Regards.
George FXtrades.
I tested the MACD (standard default settings: 12, 26 and 9) onto the 5 minutes, one hour and 4 hour EUR/USD charts recently. For all the charts, I use EMAs 10, 25 and 50 and did not use SMAs or hybrids. So far most of the trades are in line with the notes and I am happy with the outcomes.
My observations indicate that the 5 minute chart shows a more noticeable different picture of the crossover corresponding to the candlestick movements (uptrend and downtrend), as compared to the charts of one hour and 4 hour. Although at the MACD crossovers, there are instances where respective candle positions do not correspond to the EMAs (10, 25 and 50) crossover, and vice versa. Theoretically, there should be a correspondence at crossover positions between MACD and the EMAs crossovers.
Could it be the settings of the MACD and EMAs used are incorrect that lead to variable conclusion. If they are, what are your recommendations?
Another occasional occurrence is the exit point takes place sooner than expected with profit < 10 pips and all happened within 15 minutes duration on a 5-minute chart. It is meaningless to exit and close this trade with < 10 pips, and later open another new trade. I would rather allow this trade to move along until the 10 EMA returns and touches 50 EMA to close the trade at higher profit level.
What is your opinion and advice on this?
Regards.
George FXtrades.