In todays post I would like to write about the MACD and Stochastik Indicator.
Some people might fail because they overtrade. Therefore I will try to advance a simplistic approach on how one might go along trading the 5 min chart with the help of Macd and Stochastik.
The first thing we look for is our trading time. I prefer to trade from 8 AM to 6 PM UK time.
That is when we have the biggest volatility that might carry our trade forward.
Please watch when our Macd crosses the zero line from below to over.
Then watch where the 200 MA is situated. Price is over it so we only go long. So we have Macd and the 200 MA suggesting to go long so that is what we should do.
At some point in time we might expect a retracement. That is why I use the Stochatik indicator.
How far will price come against me? If long I want the Stochastic indicator to turn bullish as quickly as possible but I am aware that price might retrace 38 to 62% against me for my trade to be still valid or for my stop not be taken out.
Watch when Stochastik crosses bullish again only providing us with half a bearish cycle that is exactly what we want.
We found a trending market. At the bullish stochastik cross you might even add to your position.
When Macd crosses the zero line from over to below then you should be exiting your trade.
BEST OF PIPS