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Strategies & Market Trends : Underexposed Technical Analysis
AQN 6.490-0.6%Feb 6 9:30 AM EST
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To: Johnny Canuck who wrote (889)3/19/2021 7:44:37 PM
From: Underexposed   of 914
 
Hi Johnny

MACD usually uses 2 longer term moving averages while the Bollinger Bands, at least the way I use it, normally use shorter term averages like 20 or 30 day with 2 standard deviants as the outside envelopes.
I developed my brand of TA since about the year 2000. I am quite confident in using it after evaluating each parameter for its usefulness.

I don't use MACD in the traditional sense. The signal line is only useful IMHO with shorter durations like 5 minutes. If I were a day trader (and I am not) I would use a 5 minute chart with a traditional MACD... it is very useful there but width longer durations the signal lines can wander all over the place before being marked on a chart.

But I found that the main MACD line to be very useful when used in combination with the Slow Sto and BBWidth.



The parameters I use for each indicator are shown in the circles in this chart. The BBWidth has a standard parameter, the MACD is standard too except I remove the signal line...the Slow Sto is not standard... I found a 30 day lookback gave me a more stable and more easily read chart.

This chart show a huge buy signal in November and smaller buy signals or continuation indications in Jan and Feb .

A Buy signal occurs when you see a positive slope to the MACD and Slow Sto (usually the Slow Sto leads the way) the BBWidth slowly declines at first...The buy signal occurs when the BBWidth suddenly rises after rises of the MACD and Slow Sto



A sell signal happens when the Slow Sto and MACD are in decline and the BBWidth suddenly rises as shown here in March of 2020.

Now in truth, I would have been cautious when I saw the action of the Slow Sto before the decline. However as you can see the Slow Sto spiked to 20 several times prior to the plunge but the share price did not acknowledge it. Then the MACD started to decline that is again a cause for concern but it is the BBWidth that "Triggered" the Sell signal when it suddenly took off.

The BBWidth is the trigger... the direction depends on the other indicators.

There are other nuances in these charts using the 3 indicators to help you decide whether to continue holding a stock but this is enough for now.

These are my buy/sell rules using this chart.

Buy Signal - occurs when the slow sto has a positive slope followed a positive slope of the MACD and is triggered by a sudden rise of the BBWidth.

Sell Signal - occurs when the slow sto has a negative slope followed a negative slope of the MACD and is triggered by a sudden rise of the BBWidth.

I don't pay attention to minor rises there are ample clear cut instances to deal with.

I have successfully used this TA approach for 15+ years...along with other charts to evaluate a stock later.

UE
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