How much money do I need to start trading?
It’s difficult to start with less than $2,000 although we’ve done it. Options trades can produce hundreds of percent in returns, but they can also return a 100% loss.  If starting with less than $2,000, traders tend to put 100% of their account into each trade and this eventually leads to a 100% loss. According to the CME, 76.50% of options expire worthless so the risk of losing 100% needs to be considered when placing trades.  If you plan on starting with a smaller amount, it will require more patience because the profits will be smaller and you’ll be tempted to go all-in.  Discipline is the key no matter how small or large your account.
Where can I learn the basics of trading stocks and options?
The Stock Basics Tutorial is available from Investopedia: https://www.investopedia.com/university/stocks/ The Options Basics Tutorial is available from Investopedia: https://www.investopedia.com/university/options/ Online option courses are available from CBOE: http://www.cboe.com/education/online-courses
How much does the service cost?
The cost is $79 if paying monthly, $207 if paying quarterly, and $708 if paying annually.  Paying quarterly includes a 12.66% discount and averages out to $69 a month. Paying annually includes a 25.32% discount and averages out to $59 a month. An additional 20% discount is available for teachers, active duty or retired military, firefighters, police officers, EMTs, medics and other first responders as a “thank you” for your service (proof required).  Email proof to admin@themacdreport.com and you’ll receive an email with a link to the 20% discount.
Which software do you use for charts?
We use TC2000‘s Gold plan which provides real-time data starting around $50 a month. Another free option is www.freestockcharts.com/ although the data may be delayed.  Freestockcharts.com runs on Microsoft Silverlight which may only be available through Internet Explorer.
Who are the best brokers for trading stocks and options?
This depends on your criteria for choosing a broker.  We focus solely on cost and execution because we don’t need additional perks such as analyst’s research.  eOption offers very affordable pricing with $3 stock trades and $3 + $0.15 per contract option trades. TD Ameritrade is a solid broker but they charge $6.95 + $0.75 per option.  If buying 100 contracts, eOption would cost $18.00 whereas TD Ameritrade would cost $81.95 to open a position.  Closing the position would be an additional $18.00 and $81.95 for a total of $36 for eOption verses $163.90 for TD Ameritrade. Here’s a good article comparing brokers: Best Options Trading Brokers and Platforms
What is your trading style?
We trade almost entirely off the MACD which is a momentum indicator invented by Gerald Appel in the 1970s.  We don’t use the MACD histogram or crossover.  We look for MACD divergences when combined with clear price patterns.  These divergences often setup before explosive price moves. A more detailed explanation of the MACD is here: http://stockcharts.com/school/
Do you day trade?
We’re swing traders, but will occasionally day trade off the lower time frames.  A 30 or 60 minute divergence doesn’t last long so we may enter and exit on the same day.
What books do you recommend?

What makes The MACD Report different from other subscription services?
  1. Simplistic – This trading system doesn’t take years of study to learn.  Quality MACD divergences are fairly easy to recognize after a few weeks or months of practice and it’s possible to profit while you learn.
  2. Peaceful – Even though we’ve traded for years, losing trades still affect us emotionally and is something we try to avoid.  Quality MACD setups rarely fail so you can hit a very high winning percentage as opposed to cutting loss after loss and trying to overcome your emotions.
  3. Transparent – Most of our competitors don’t show their track record, but our trading history is available on the Returns Tab.
  4. Competitive – This service is affordable so you can dedicate more of your income to building up your trading account.  Most of our competitors charge $200+ a month, yet our track record speaks for itself.
  5. Flexible – You can trade a divergence on any time frame.  It doesn’t matter if you’re a day trader or working around a full-time job. Find the divergence that fits your time horizon.  If you can’t watch the stock every day, trade off the weekly and monthly divergences which will stay strong for months or years.
Will I be able to trade while working full-time?
Yes, but you’ll need to focus on MACD divergences on longer time frames such as the daily, weekly and monthly.  The longer time frames require less babysitting and often last for weeks and months.
Will you trade for me or give me investment advice?
No, we’re not financial advisors and cannot give customized advice. This publication is dedicated to the education of online traders and is an information service only. The information provided herein is not to be construed as an offer to buy or sell stocks or options of any kind. Our personal investment decisions are not to be considered a recommendation to buy any stock or option contract, but an aid to investors in making an informed decision based on technical analysis. We will answer questions that are educational and general in nature, but are not financial advisor and cannot give specific advice to subscribers of this service. This service shows our methodology and real-time trades in an attempt to educate others. By signing up as a subscriber, you agree to take personal responsibility for your trades; both gains and losses. Please consult a qualified professional before trading any stock or option contract. Past performance does not guarantee future results.
What qualifies as a Pattern Day Trader?
If you place four or more day trades within five business days, you’ll be classified as a “Pattern Day Trader” and receive a margin call for $25,000 minus your current account value.  You’ll have to maintain this $25,000 requirement or you won’t be allowed to day trade.  After 90 days without a day trade, the Pattern Day Trader flag will be lifted.  If you make this mistake and cannot meet the margin call, it’s probably best to change brokers for 90 days. For more information, go to http://www.finra.org/investors/day-trading-margin-requirements-know-rules
Do I use market orders or limit orders?
We always use limits order because of slippage.  Slippage isn’t an issue on heavily traded stocks, but slippage can be huge on option contracts with huge spreads.  If options are thinly traded, the bid/ask may be wide.  For example, an option might be listed with an ask of $1.50 and a bid of $1.00.  If entering a market order to buy, you’ll be filled at $1.50.  If you enter a limit order to buy in the middle of the bid/ask, you might be filled at $1.25 or $1.30.
How often do you trade?
We point out 10-15 divergences every month, but don’t trade every setup.  We average 4-5 stock trades and 2-3 option trades a month.
How long do you stay in a trade?
Our holding period varies based on the divergence.  A monthly or weekly divergence can last several weeks whereas a 30 or 60 minute divergence lasts only a day or two.  We’re considered swing traders so 80-90% of our trades are held between two days and a few weeks.
Do you trade penny stocks?
No.  Our experience is that most penny stocks are priced low for a reason.  We can buy options on AAPL or AMZN and make 200% or more so we don’t need the risk of penny stocks.  Although there may be a few diamonds in the rough, most penny stocks aren’t worth the risk.  These stocks often see their trading halted or go bankrupt.
How much of my account should I dedicate to each stock or option position?

We’re not financial advisors so we don’t make recommendation on position size.  We do reveal the size of our position as a percentage of our total portfolio for education purposes.  For example, a trade alert will look similar to this, “Bought 500 shares SPY for $247.46. 15% position size. A-rated setup.” or “Bought 100 contracts SPY $245 April 2018 calls at $1.37. 7% position size. B-rated setup.” We rate all setup according to the following scale:

Index:

  • A-rated setup = the best setups = 50% maximum position, 25% maximum option position
  • B-rated setup = riskier setups = 30% maximum position, 15% maximum option position
  • C-rated setup = speculative setups = 10% maximum position, 5% maximum option position

Individual Stock:

  • A-rated setup = the best setups = 30% maximum position, 15% maximum option position
  • B-rated setup = riskier setups = 20% maximum position, 10% maximum option position
  • C-rated setup = speculative setups = 10% maximum position, 5% maximum option position

*We trade larger positions on indexes such as SPY, QQQ, IWM, GDX, XLE, EEM, IBB, KBE, OIH, XLF, XRT, XOP because these consist of dozens or even hundreds of individual stocks.  This diversification represent significantly lower risk.  For example, if JP Morgan (JPM) gaps down 20% due to earnings, this will barely affect SPY because JPM represents only 1.63% of SPY as of 1/19/2018.  A 20% loss in a 1.63% position is manageable whereas a 20% loss is agonizing.

What types of option strategies do you use?
We primarily buy calls and puts.  We’ll occasionally sell covered calls on a stock position, but it’s rare.
Do you offer refunds?
We don’t offer refunds.  All subscriptions come with a 10 day trial for $10 and then automatically renew to the price and term you’ve chosen.
How do I cancel my subscription?
Before your renewal, email a cancellation request to admin@themacdreport.com.
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