How to avoid false signals using MACD?

D

DayTrade001

Hi,

I'm using MACD for entries and exits. I'm getting false signals, when market does not move much in that direction and getting losing trades.

How do I filter these signals? Also I'm getting late entries and exits, how do I enter bit earlier?

I'm using MACD(12,26,9), is there any better configuration of MACD, to get better entries. I'm trading ES.

Experts please advise.

Thanks
 
From personal experience, I have found that the surest way to avoid false signals from an indicator is to ignore the indicator altogether.
 
Quote from DayTrade001:

Hi,

I'm using MACD for entries and exits. I'm getting false signals, when market does not move much in that direction and getting losing trades.

How do I filter these signals? Also I'm getting late entries and exits, how do I enter bit earlier?

I'm using MACD(12,26,9), is there any better configuration of MACD, to get better entries. I'm trading ES.

Experts please advise.

Thanks
More...
MACD doesn't work on a consistent basis. It has been the ruin of many a trader. Chuck it before you blow out your account.
 
Quote from Thunderdog:

From personal experience, I have found that the surest way to avoid false signals from an indicator is to ignore the indicator altogether.
More...

amen brother.
 
Quote from Thunderdog:

From personal experience, I have found that the surest way to avoid false signals from an indicator is to ignore the indicator altogether.
More...

Dito, if it doesn't work don't use it.
 
how are you using it - crosses or histo or both? Timeframes and how long have you been trading? Is that your technique - macd or is there more to how you enter and exit?
 
Quote from Thunderdog:

From personal experience, I have found that the surest way to avoid false signals from an indicator is to ignore the indicator altogether.
More...

Touché! Sharp as usual! :D
 
Basically when you are getting into a trade on the back of MACD or most indicators really, everyone else is unloading their profitable trades to you. You need to be in before the indicator turns. If you're long and THEN you get things like MACD turning up in your favour, then you can maybe be more confident about holding the trade a little longer, or running partial with a trailing stop. Don't try using these indicator signals as a trading mechanism - trading just isn't that easy.

Probably the best use for MACD etc is to look for divergences. Even then this doesn't mean a trade, it means be aware and on your guard.

I'm guessing you're new to trading and my advice would be to forget indicators as a trading mechanism. Use for divergences and confirmation of a trade you might already be in. I feel these indicators have slightly more value on higher timeframed charts as you can look to get in on the current trend. However, you should be able to simply look at the chart and see what the trend is.

If you're new, just watch the price action. Learn to feel the market, then make your own mind up about whether you feel it's going up or down. All these indicators are lagging and you will always be behind the curve. Look for basic price patterns to begin with, triangles, flags and stuff, failed tops and bottoms etc.

Good luck.
 
Quote from DayTrade001:

Hi,

I'm using MACD for entries and exits. I'm getting false signals, when market does not move much in that direction and getting losing trades.

How do I filter these signals? Also I'm getting late entries and exits, how do I enter bit earlier?

I'm using MACD(12,26,9), is there any better configuration of MACD, to get better entries. I'm trading ES.

Experts please advise.

Thanks
More...
The two classic parameter sets put forth by the inventor of MACD (Appel) are:

8,17,9 and 12,25,9.

"12,26,9" is a contender for the ultimate typo that won't die, because it now outnumbers the correct parameter set.

So give 8,17,9 a try. Good luck.
 
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