The MACD ReportA Powerful, Proven Strategy for Trading ETFs, Options & Individual Stocks
1) Analyze the Price Patterns
Look for double bottoms, double tops, triple bottoms, triple tops, head & shoulder bottoms, head & shoulder tops.
2) Find the MACD Divergence
The MACD often reveals strength or weakness before the price moves. Most divergence trades appear on the 30 min, 60 min, 2 hour, 4 hour & daily charts.
“Your life does not get better by chance, it gets better by change.”
3) Confirm the Setup
The most successful setups are confirmed by the sector (e.g. XRT, XLE, GDX) or overall market (e.g. SPY, IWM, QQQ). Check the stock’s competitors and sector index or ETF.
4) Stock or Option
Options require the highest probability setups because over 75% expire worthless according to CME. Most trades justify only a stock position.
“You cannot grow unless you are willing to change. You will never improve yourself if you cling to what used to be.”
5) Time Horizon
Trade the option or stock based on the time frame of the divergence. Monthly divergences take months and weekly divergences take weeks to play out.
6) Entry & Exit
Watch the intraday charts for clear entries and exits. A monthly or weekly divergence might take months to work out, but will move very quickly when combined with intraday divergences.