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Nothing Happens Until It Happens

Nothing Happens Until It Happens

Richard Krivo, Trading Instructor

Student's Question:Ive made trades where you enter a position when it looks like the MACD is going to intersect (crossover) but it doesn't and it goes even further in the direction in which it was going, ultimately hurting my account pretty bad, any suggestions?Instructors Response:SureFirst and foremost we only want to take trades in the direction of the trend on the Daily chart...that is the first filter.Check that out before the indicator is consulted.Don't let the MACD (or any other indicator for that matter) decide the direction of the trend for you. The indicator does not know the direction of the trend! The trader makes the determination of which direction to be trading the pair based on the direction of the Daily chart. Once that is done, then we consult the MACD to fine tune our entry in the direction of the Daily trend.Next, it is strongly advised not to take a trade when it looks your entry signalmight happen...wait until your entry signal does happen.

Looking at the 4 hour chart of the EURCHF below we can see two areas where the MACD line looked like it might cross over the Signal line. In each instance it did not…

Nothing_Happens_Until_It_Happens_body_chart_5_19_11.png, Nothing Happens Until It Happens

Remember…”nothing happens until it happens”.

Patience and disciplineare two traits that will serve a trader well over time.

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

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