The MACD 5 bars histogram is an excellent swing trading strategy for beginners. The beauty of this strategy is that it does not require you to monitor the market for a long time. It also signals you well in advance as to when the entry of a trade is about to take place.
When prices rise, the histogram bar becomes longer as the speed of theprice movement accelerates; the bar contracts as price movement decelerates. The same principle applies when prices are falling, but the histogram bars form at the bottom.
Time Frame: H1 and H4;
Currency pairs:majors.
The MACD histogram indicates the direction and momentum of the market. When the MACD histogram switches from negative to positive, this indicates a possible upward shift in momentum. We wait for fi ve positive bars on the histogram to confirm the momentum before entering a long
trade on the fi fth bar. No prizes for guessing why the name of this strategy is called the fi fth element!
When the MACD histogram switches from positive to negative, this indicates a possible downward shift in momentum. We wait for fi ve negative bars of the histogram to confi rm the momentum before entering a short trade on the fifth bar.
Buy
Wait for the MACD histogram to go from negative (<0) to positive (>0).
Wait for four positive bars to form on the histogram before going long
on the opening candle of the fifth histogram.
Set the stop loss at the last low histogram.
The trade will have two profit targets with risk to reward ratios of 1:1
and 1:2 respectively.
Sell
Wait for the MACD histogram to go from positive (<0) to negative (>0).
Wait for four negative bars of the histogram before going short on the
opening candle of the fi fth histogram.
Set the stop loss at the previous high swing.
The trade will have two profit targets with risk to reward ratios of 1:1
and 1:2 respectively.
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MACD 5 bars histogram buy example |
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MACD 5 bars histogram sell example |
MACD 5 bars histogram
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Oleh
Piratebay
