Quote from jack hershey:
Based upon your comments about trading fractal, trade frequency, streams of capital running, the price range, and time of trades, I have some recommendations on the pair of indicators you are using, etc..
By comingling the market analysis and the instruments' characterisitics, you must use the pair of indicators to que your preference of crossover candidates to go from one instrument to another in each of your seven streams. The originator of MACD uses absolute values for doing a go/no go test but you limit yourself to gating by observing a contrast in relative values at a time that is most remote (stale data) from the time of data taking.
You sneak a peak as you say, to deal with this.
For EOD trading it is true that the two segments of the index profile are opposites over long times (RTH is net negative and non RTH is net positive) but for short term trading (your average hold is a day) even longer than you do, the short term cycle net well overrules the long term trend of markets. This means that you have relatively poor entries because of timing and relatively poor exits as well. I assume you exit to have capital for a better trade that is available.
I admit my fav type of trade is one that frontruns opening gaps by taking the trade along with the bottom fishers and after the day traders leaving for the day. It is in contrast to what you do sort of since the hold for frontrunning a gap trade is like your hold. We use differing fractals to achieve the same hold and I do use MACD differently than you do and not as a trigger. So I recommend that you do a MACD multi-fractal assessment rather than a MACD pair on the EOD fractal.
Doubling every 2 to 3 months is not the ballbark for one day holds (buying near close and selling near close on day plus 1) on multi-streams. I recommend making the market analysis and trading strategy each autonomous to begin to look into this. Your instrument criteria is almost absent. Were you to sharpen it, you would get the benefits of "they all look alike to me" and the high Beta. Orijinal, obviously does not trade with high Beta stocks among other things, for example.
The trading strategy, unhitched from the markets, would allow you to see the opportunity of having timing working for you. Using a one day hold time on average as a stategy means you have to to pick the portion of the instrument cycle that has the highest money velocity. Opening gaps are best, but you do not select your trades to do that. The alternative available with MACD pairs (either on one fractal or on two fractals) is the breakout portion of a cycle which occurs and completes during RTH of one day. So you would have to revise the data analysis time in your strategy and use a faster fractal to get the signal.
Doubling money involves doing a set of cycles. The one day hold is the cycle time so doubling comes down to profit per cycle. There is no way your approach can take 40 to 60 days to double. It is not possible to make so little money per cycle to take that long. Taking 40 to 60 days is like trading noise or some other betting approach. Probably a portion of a month may be involved; for high Beta it is somewhat over a week using the one day hold you use.
