MACD double crossover

04/07/2017 admin

You have probably noticed that the most effective strategies often use the MACD indicator. And what will happen if you take two MACD instead of one? The performance is doubled! The key point is to achieve their right configuration and understand the signals to start trading. This is what we are going to teach you now!

How to set the indicators

Traders who want to make use of this strategy should apply the two MACD indicators to the chart. To do this, click on the “Indicators” button in the lower left corner of the platform and select “Moving average convergence divergence” (abbreviated as MACD).

The first MACD will show short-term price fluctuations. Set the following parameters for it:

Fast length 8
Slow length 12
MACD length 9

The second MACD is needed to identify the main trend (i.e. use the trend direction as the entry point to trade). Set the following parameters for it:

Fast length 25
Slow length 50
MACD length 9

It is convenient to set different colors to the two indicators (see screenshots above).

How to trade using this strategy?

Trade UPWARDS when:

The lines of the second MACD indicator (showing the trend) are positioned above zero level. This means an uptrend;
The lines of the first indicator (showing short-term changes) fell below the zero mark and then turned around and crossed the “0” level upwards. This means that the correction is over.

Trade DOWNWARDS when:

The lines of the second indicator (showing the trend) are positioned above the zero level. This means a downtrend;
The lines of the first MACD indicator (showing short-term changes) rise above the zero mark and then turned around and crossed the “0” level downwards. This means that the correction is over.

IMPORTANT! The MACD double crossover is a trend strategy and so it works best during the European session and in the first half of the American session – from approximately 07:00 to 17:00 UTC.

Expiration periods and risk management

We advise you to use the strategy on the youngest timeframe of the “5s” Binomo platform with the expiration period 1 minute.

2-3% of the deposit size is the classical risk size that is considered to be safest for exchange trading. Do not conclude transactions for amounts exceeding 2-3% of your capital and 1% is enough if you just begin your financial career.