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Multiple time frame MACD strategies updated – 77% success for BINANCE:ETHUSDT by craig59005

I’ve backtested this one over 200 times on multiple time frames and find using the higher timeframe to identify trend and weed out the false signals it works pretty well.

HOW TO IMPLEMENT :

Chart setup.

Trading rush EMA – 200 period – timeframe same as chart – search in indicators for this one. Note at the bottom.
EMA -MA crossover – set to 20 period MA, 50 period EMA . I use the crossover indicator made by @Hpotter but you could just as easily set these up as separate EMA and MA on the chart, which is what I do on my Binance charts.

Lower time frame MACD – timeframe same as the charts, I take out the histogram as I don’t find this useful, and put a horizontal line on the zero.

Higher time frame MACD – Timeframe set to at least 4x the lower time frame, 1min-5min, 5min-30min, 15min-60min. etc etc.

Using the Higher time frame MACD to identify the current momentum in the price. If the MACD line is below the signal line then you are either focusing on taking short trades when it goes below the 200 period EMA , or you stay out of the long signals until the MACD crosses back above the signal line.

This goes the same for the MACD being above the line, if the macd is above the signal line and your price action is above the 200 EMA then you are looking for the next long opportunity on the shorter time frame MACD , if you’re price action is below the 200 period EMA then you are waiting for the higher time frame MACD to cross back, or the price action to come back above the 200 EMA .

LONG SETUP :

Higher time frame MACD is above the signal line

Price action is above the 200 period EMA

lower time frame MACD crosses over the signal line going up. (best practice is to keep these crossovers below the zero line, but on shorter time frames it still works on either side of zero)

EMA-MA crossover candles are green, 20 period MA is above 50 period EMA .

Stop loss set at last swing low, or flat bottom. If these are below the 200 EMA , set your stop loss just past the 200 EMA .

Price target 1.5xR.

SHORT SETUP :

Higher time frame MACD is below the signal line

Price action is below the 200 period EMA

lower time frame MACD crosses over the signal line going down. (best practice is to keep these crossovers above the zero line, but on shorter time frames it still works on either side of zero)

EMA-MA crossover candles are red, 20 period MA is below 50 period EMA .

Stop loss set at last swing high, or flat top. If these are above the 200 EMA , set your stop loss just past the 200 EMA .

Price target 1.5xR.

BACK TEST RESULTS ON ALL TIME FRAMES. WORKING WITH A 1.5xR.

15min chart – 15min & 60min MACD – 68 wins 48 losses – 58% success – 18% profit on original account.

5min chart – 5min and 30min MACD – 60wins 30 losses – 66% success – 20% profit on original account

1min chart – 1min and 5min MACD – 97wins 53 losses – 64% success – 30% profit on original account.

Other findings during backtesting –

Potential of over 1.5xR

1.5xR – 27% chance of 1.5xR and nothing more.

2xR – 18% chance of 2xR and nothing more

3xR – 9% chance of 3xR and nothing more

over 4xR – 45% chance of over 4xR.

Whilst I try to stick to a solid 1.5xR where I can, you can see from these stats that actually there is a 72% chance of getting more than 1.5xR on this strategy, this all comes down to your appetite for risk and volatility within the market, this would effectively mean that 27% of your trades could potentially go from a winning trade at 1.5xR to a losing trade, but 72% of your trades would return more than 2xR, so it would be worth weighing up these risks when setting up this strategy as this would reduce the success rate of the overall strategy but will alter the ROI overall, potentially for the better dependant on the outcomes.

Solid strategy and pretty simple to implement, thankyou to TRADINGRUSH for helping me understand MACD .

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