The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at toddstrade@gmail.com
I am always open to questions, comments, or suggestions on how to improve this blog.


Sunday, April 26, 2009

3/10 strategy

I present to you the strategy I employ using the 3/10 macd. If you need to be schooled on the intricacies of the 3/10 I refer you to the following posts:
The basic creationA previous post
Another strategyThe strategy is simple and straightforward and it can be used on any time frame. It does not address exiting trades, for that is largely dependent upon your personal time frame. The charts I use include the 3/10 macd in the sub-chart. The "Slow line" I will refer to is colored white.The "Slow Line" will define your trend. If above the zero-line OR having a positive slope, you're looking to buy dips in the histogram (price). Dips can be defined as a pullback in the histogram from previous readings, and the "dip" would be confirmed by the first move in the opposite direction.
If below the zero-line OR having a negative slope, you're looking to sell peaks in the histogram.
Simple enough, yeah? Or am I making it more complicated with my wordiness?
The chart below should illustrate further. I didn't cherry-pick the chart, I opened my chart analysis and SPY came up automatically so that's what I used. If there are any further questions do feel free to inquire.

2 comments:

todd said...

David L. Spurr has left a new comment on your post "the 3-10 first cross":

Great Interesting piece. I use TOS for my charts and they have a programming language that allows you to plot indicators you construct. I reworked the MACD indicator with the simple moving averages. Here's the code for anyone using TOS:

declare lower;

input fastLength =3;
input slowLength = 10;
input MACDLength =16;


def fastAvg = simpleMovingAvg(close, length = fastLength);

def slowAvg = simpleMovingAvg(close, length = slowLength);

plot Value = fastAvg - slowAvg;

plot Avg = simpleMovingAvg(Value, length = MACDLength);

plot Diff = value - avg;

diff.AssignValueColor(if diff >= 0 then Color.UPTICK else Color.DOWNTICK);

Diff.SetPaintingStrategy(PaintingStrategy.HISTOGRAM);

plot ZeroLine = 0;

Diff.SetDefaultColor(GetColor(5));
Avg.SetDefaultColor(GetColor(8));
Value.SetDefaultColor(GetColor(1));
ZeroLine.SetDefaultColor(GetColor(0));


Enjoy,

DS

http://displacedema.blogspot.com

todd said...

I must have accidentally deleted the comment by David of http://displacedema.blogspot.com
so I just pasted the content back in. I am sorry for the mis-click of my mouse finger.

-todd