Excellent ! thank you for better than expected answer to my wondering about the importance of zero line. Any more to say about ? a part 2 about MACD is or will be available?
Thanks for the feedback. Yes, it works on all times frames. Go look at the QQQ 1min chart yesterday at 12pm EST. There is a good example of a reverse divergence at the Zero line. As always, trends get noisy on micro time frames and tend to be a little less reliable overall. Joe
I've been back testing a setup waiting for macd line to move through the zero line before getting into the trade as an additional confluence but only if the move is also with a strong histogram signal. Wondering if there's any real added reason to wait for this? Read somewhere this is proof of the trend strength but not sure if this is true?
Hi, this video well explains the action around the Macd zero line, but how do you treat the Macd when it is high above the zero line ? do you disregard it completely?
I would scroll back historically on that time frame and see if MACD has an overbought zone and an oversold zone which is somewhat consistent. Then, look for momentum divergence in those zones. Usually, as MACD move away from zero line, you will get a couple of good pullback trades and then it gets more difficult as it reaches overbought territory. Joe
Based in my observation, the MACD patterns can change dramatically across different Timeframes when there is some significant price action movement initially at 1 minute Timeframes. Hence MACD pattern is dynamically changing and senstive to price change.
I use TC2000 for advanced screening. TradingView for market hours analysis. Amibroker for Printing out series of charts and making reports. They are all good.
Most indicators go from 0 to 100 so it wouldn’t work on most. ATR is just a number but you could do a calculation on it to create a normalized range. But then the zero line would more likely be a 50 line.
Amazing content Sir. Wondering on the interpretation of the zero line watched couple of videos but none of them giving this much insight. I will try to apply this to crypto trading. Thanks alot for sharing this video. In general what can be said about bullish crossovers waaaaay below the zero line on higher timeframes like the daily?
Sorry your comment was held for review so I didn’t see it. Bullish crossover is a good sign but you need to analyze how many days the market is up before the cross. Quite often, the signal will take place and it will overbought.
Thanks Joe! New to the channel. I've been strugging at interpreting signals but you did a great job at simplifing MACD. Especially the significance of what the 12,26 numbers really meant. This will also help when I get to the section in the book as well as view your previous uploads. How accurate are MACD signals after times of sudden drops such as the housing market crash and recently march 2020? And alternatively, were there technical signals as well before these drops?
Welcome to the channel. I agree this should help when you get to MACD section in the book. Indicators such as MACD and ADX will tend to lag when the volatility explodes like in the examples you mention. When this happens, we want to focus on Price, Volume, support and resistance and moving averages. It does not mean we dismiss the MACD and ADX but they will carry less significance at these points in time. One important point. ADX gave a great sell signal (using momentum divergence) at the peak prior to the drop in 2020. If you go back to my videos from that time, I show how we took advantage of that using SPY puts. Joe
I use the Zero line on the higher timeframe to find good trade locations. But, in addition, the Zero line can be very helpful on the lower timeframe. How the MACD handles the Zero line on a pullback tells us a lot about what type of trigger to use. If MACD holds the Zero line, then you want to use a more aggressive trend line trigger. If it doesn’t, in most cases, you will want to wait for a little more confirmation in the form of a 1-2-3 change in trend.
The Zero line is the point where the 12ema and the 26ema are equal. Sorry, On this channel, I tell people I assume viewers are familiar with the basics of the indicator and their calculation. Thanks for pointing that out.
Underrated channel
Thanks! Much appreciated
very interesting! i will back test this and try to figure this into my strategy. thanks.
Great video! Was a bit unclear on MACD reverse divergence as explained in your book, but I totally get it now. Thanks!
I appreciate the feedback
Excellent ! thank you for better than expected answer to my wondering about the importance of zero line. Any more to say about ? a part 2 about MACD is or will be available?
Go to MACD playlist on my channel. Lots of videos.
@@investlikeapro7977 Appreciate it, will watch them all :)
Thank you for this great info. Just have one question though. Does this setup work better on higher timeframes or on any timeframes?
Thanks for the feedback. Yes, it works on all times frames. Go look at the QQQ 1min chart yesterday at 12pm EST. There is a good example of a reverse divergence at the Zero line. As always, trends get noisy on micro time frames and tend to be a little less reliable overall. Joe
@@investlikeapro7977 Thank you for clearing my doubt. :)
I've been back testing a setup waiting for macd line to move through the zero line before getting into the trade as an additional confluence but only if the move is also with a strong histogram signal. Wondering if there's any real added reason to wait for this? Read somewhere this is proof of the trend strength but not sure if this is true?
Don’t think the answer is always the same. It depends on what is taking place on the higher timeframe many times.
Hi, this video well explains the action around the Macd zero line, but how do you treat the Macd when it is high above the zero line ? do you disregard it completely?
I would scroll back historically on that time frame and see if MACD has an overbought zone and an oversold zone which is somewhat consistent. Then, look for momentum divergence in those zones. Usually, as MACD move away from zero line, you will get a couple of good pullback trades and then it gets more difficult as it reaches overbought territory. Joe
@@investlikeapro7977 Thank you
Based in my observation, the MACD patterns can change dramatically across different Timeframes when there is some significant price action movement initially at 1 minute Timeframes. Hence MACD pattern is dynamically changing and senstive to price change.
More volatility on the micro timeframes but the patterns from my book/course repeat on all timeframes.
Thanks Joe!
What is your preferred research software?
I use TC2000 for advanced screening. TradingView for market hours analysis. Amibroker for Printing out series of charts and making reports. They are all good.
Please is there anyway I can add a zero line to any indicator like the ATR.
I use MT4.
Most indicators go from 0 to 100 so it wouldn’t work on most. ATR is just a number but you could do a calculation on it to create a normalized range. But then the zero line would more likely be a 50 line.
@@investlikeapro7977 thanks I really appreciate your response.
Amazing content Sir. Wondering on the interpretation of the zero line watched couple of videos but none of them giving this much insight. I will try to apply this to crypto trading. Thanks alot for sharing this video.
In general what can be said about bullish crossovers waaaaay below the zero line on higher timeframes like the daily?
Sorry your comment was held for review so I didn’t see it. Bullish crossover is a good sign but you need to analyze how many days the market is up before the cross. Quite often, the signal will take place and it will overbought.
You are the macd master
haha. Thanks.
Thanks Joe! New to the channel. I've been strugging at interpreting signals but you did a great job at simplifing MACD. Especially the significance of what the 12,26 numbers really meant. This will also help when I get to the section in the book as well as view your previous uploads.
How accurate are MACD signals after times of sudden drops such as the housing market crash and recently march 2020? And alternatively, were there technical signals as well before these drops?
Welcome to the channel. I agree this should help when you get to MACD section in the book.
Indicators such as MACD and ADX will tend to lag when the volatility explodes like in the examples you mention. When this happens, we want to focus on Price, Volume, support and resistance and moving averages. It does not mean we dismiss the MACD and ADX but they will carry less significance at these points in time.
One important point. ADX gave a great sell signal (using momentum divergence) at the peak prior to the drop in 2020. If you go back to my videos from that time, I show how we took advantage of that using SPY puts.
Joe
Here is one video of how we used MACD during the decline in 2020. ua-cam.com/video/xOdOTxq6Axw/v-deo.html
Thank you! Looking forward to more content.
Here is the ADX video: ua-cam.com/video/6ar62riwQow/v-deo.html
Hi, does the Zero line count for lower time frame or just Higher Timeframe.
I use the Zero line on the higher timeframe to find good trade locations. But, in addition, the Zero line can be very helpful on the lower timeframe. How the MACD handles the Zero line on a pullback tells us a lot about what type of trigger to use. If MACD holds the Zero line, then you want to use a more aggressive trend line trigger. If it doesn’t, in most cases, you will want to wait for a little more confirmation in the form of a 1-2-3 change in trend.
Watched both your video. Still not sure what the zero line IS
The Zero line is the point where the 12ema and the 26ema are equal. Sorry, On this channel, I tell people I assume viewers are familiar with the basics of the indicator and their calculation. Thanks for pointing that out.
@@investlikeapro7977 thanks for the reply!
Great video. Why is 12 / 26 the standard? Why not 10/20 or 9/18 ? The 18MA seems very important.
Original creator found 12/26 exponential to provide the best signals. I think they provide great signals as well so I have never tinkered with it.