We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/OjTZOQEytM https://t.co/1TOiApxfjp
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Gold: -0.44% Oil - US Crude: -1.23% Silver: -1.39% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/mBBDXIGnyn
  • US is considering curbing special exemptions for Chinese firms, according to Politico
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: -0.06% 🇨🇭CHF: -0.22% 🇨🇦CAD: -0.23% 🇯🇵JPY: -0.29% 🇳🇿NZD: -0.39% 🇦🇺AUD: -0.58% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/rst0kqdDrJ
  • Coming up at half past the hour. Please join me if you can... https://t.co/R2GcBc8KXS
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: US 500: -0.79% Wall Street: -1.00% France 40: -1.13% FTSE 100: -1.35% Germany 30: -1.52% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/u3dcuMGQBh
  • Since mid-June USD/CAD has consolidated in a well-defined zone. Will today’s Fed members speeches (14:00- 18:00 and 19:00 UK) push the pair in a clear direction? #USDCAD, #USD, #Fed https://t.co/SxjnwNupP2
  • Join @MartinSEssex 's #webinar at 6:30 AM ET/10:30 AM GMT to learn more about trading #sentiment Register here: https://t.co/XUUPRdY06p https://t.co/KsjQit31hK
  • Have you been catching on your @DailyFX podcast "Global Markets Decoded"? Catch up on them now, before new episodes release! https://t.co/Twr44cZ1GB https://t.co/Qe7aw1a6UU
  • Crude Oil Prices May Turn Lower as Covid-19 Fears Reemerge - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/07/07/Crude-Oil-Prices-May-Turn-Lower-as-Covid-19-Fears-Reemerge.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #CrudeOil #oott #COVID19
Strategy Series: The Easy MAC

Strategy Series: The Easy MAC

2015-01-06 19:01:00
Walker England, Forex Trading Instructor
Share:

Talking Points:

  • Strong Trends Have Retracements, Ideal for Re-entering the Market
  • Market Direction and Entries can be Determined with EMA’s
  • Use MACD and Trailing Stops to Manage Risk

Traders should be prepared to trade a variety of charts and market conditions by having multiple strategies at their disposal. In our previous strategy session, we reviewed trading inside bars. Today we will continue our conversation, by reviewing the “Easy MAC” strategy for trending markets. Let’s get started!

Find the Trend and Retracements

The “Easy MAC” approach is a retracement strategy; it is therefore import to be familiar with the concepts, trend identification and price retracement. To help identify market direction and market pullbacks this strategy uses four separate EMA’s (200, 30, 25, 3). Each of these EMAs will have a specific purpose to the “Easy MAC” strategy when added to a 2Hr chart. Note: it is recommended to color code the averages so that you can easily remember their values.

Below we can see an example of all of our averages at work. First concept: trend identification. The trend is considered to be down because price is below the 200 EMA. Keep this in mind, because if prices were instead above the 200 EMA the pair would be considered in an uptrend. Second concept: price retracement. To locate this movement a trader will watch the 3 and 30 period EMAs. If the 3 EMA moves above the 30, as highlighted in the graph below, it will be considered a retracement or a pullback against the trend.

Strategy Series: The Easy MAC

Execution

So now that you have identified the trend, the next question is when to time a market entry. First off, we will again be using our EMAs, so leave them on your graph! The idea here is that we want to enter into the market after a retracement has concluded. Also remember price is in a downtrend, so we will only look to place sell orders when the trend resumes!

Execution occurs when the 3 period EMA closes back under the 30 period EMA. This is normally done with a market order, and for the “Easy Mac” strategy a two lot order system is used. Once market entries are placed, the final step of the strategy is to determine where and how to exit the market.

Strategy Series: The Easy MAC

Managing Exits and Risk

As the final step, traders must know where to exit the market and how to manage risk. When it comes to the “Easy MAC” strategy, this process utilizes two indicators. First, MACD needs to be added onto your chart. The first lot of this strategy should be exited on the next MACD crossover. This occurs when MACD moves back above the signal line in a downtrend.

The second lot of this strategy will utilize a trailing stop. This stop should be attached to the 25 EMA. This order will continue to trail as long as the pair continues to move in our favor. As soon as price reaches the EMA, the final order should be closed immediately.

Strategy Series: The Easy MAC

The “Easy Mac” retracement trading strategy is just one installment of an ongoing article series on market strategies. If you missed one of the previously mentioned strategies, don’t worry! You can catch up on all of the action with the previous articles linked below.

Strategy 1: Trading Inside Bars with OCO Orders

Strategy 2: The Easy MAC

Strategy3: The CCI Swing

Strategy 4: The HI-Low Breakout

Strategy 5: Day Trading Market Reversals

Strategy 6: Trend Trading with ADX

---Written by Walker England, Trading Instructor

To contact Walker, email instructor@dailyfx.com. Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list, CLICK HEREand enter in your email information

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.