|These contributions are from Mike Bruns, world class trader.
Mike's clear thinking and charts have allowed for many traders to finally
"get it". His generous sharing and teachings have helped me raise my
level of trading. Reinforcing the concepts of trading with the trend,
his knowledge of the bond market and other markets. Mike also gives after
market hours seminars for members, they are exceptional. My personal thanks
this is still you, choose today to change. This
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Location: With the Trend
MACD is a momentum indicator composed of two
moving averages, a Fast Line (FL), a Slow Line (SL).
A Base Line (BL) is the third component of the standard MACD.
The values used are:
3, 11, 16
We are comparing the
relationships of all three lines to each other to establish the set up in a
“zone of opportunity.” Once in
the zone, the price bars decide the point of entry.
The chart plots the Moving
Average (MA). I prefer the
30-period weighted moving average. The
20-period exponential moving average is fine also.
are looking to take the trade in the direction
of the Moving Average (MA).
The Slow Line (SL) has crossed
over the Base Line (BL) in the direction of the Moving Average (MA).
The Fast Line
crosses over the Slow Line in the opposite direction.
At this point, we are looking for and anticipating a conservative setup.
Instead, the prices reverse back to the direction of the Moving Average
and the Fast Line turns in the direction of the Moving Average.
All without the Fast Line crossing over the Base Line to set up the
There is no time or place
to set a stop or stop limit order. We
enter immediately at the market in the direction of the Moving Average.
We place our initial stop loss at the opposite end of the last completed
The exit for profit is
based on price action as it develops and the relationship of the entry in this
time frame with the larger time frames.
In this example of the
Eurocurrency, the MA is down so we are looking to sell.
We just completed a nice MACD Conservative Sell and let’s see if we can
get another one. The SL < BL.
The FL > SL but turns down before reaching the BL. We sell at the market on
one of the price bars indicated by the two arrows.
It depends on how fast we are at recognizing what just happened.
And we are short the market.
In this example of the SP mini
contract (ES), the Moving Average is up and we want to go long.
The SL > BL and the FL < SL. Then, the FL turns up.
We immediately enter a market order to go long at the area of the bars
with the arrows, depending on how fast we recognize what just happened.
Initial stop loss is placed at the opposite end of the last completed
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