This was Jimmer's original MACD crossover system, since superceded
by his 2X method. Jimmer kindly posted it for all of us to study.
It uses a combination of price action and indicators to catch big
and small moves in the index futures. There's much to be learned
from studying it, even though he has since moved beyond it. For
Jimmer's latest work, see the 2X page.
Setup (tested only on NQ)
Work with 3 min or 2 min
MACD 8,13,5 (4,11,6 can also work very well) - I use lines, but
histogram ok also.
Bollinger bands 8 period simple with 1.8 standard deviation
Moving averages - 5e, 8s
1. If flat, enter long or short in direction of fast line when
MACD fast line crosses the slow line on a closed bar basis, entering
one tick past the closed bar. If crossover is very near, but not
fully accomplished as of a bar close, trader has d iscretion to
enter upon takeout of approaching bar in direction of anticipated
2. Continuation entries can be made either as re-entries or adds
upon takeout of retracement bars Continuation simply means resumption
of a trend after a retrace of no more than 6 bars.
3. Except for continuation entries, never enter long when price
is in top 1/3 of BB range or short when in bottom 1/3. This rule
is meant to avoid whipsaw losses during chop.
4. If traded move is 20 points or more or if new HOD/LOD after first
30 minutes and is stopped out do not enter in reverse direction
even if MACD has crossed unless or until:
a. MACD and/or stochastic have retraced and then made lower high
or higher low (divergence). Enter in direction of MACD signal upon
takeout of retracement bar in needed direction, or
b. MACD histogram dips and then makes a lower high or higher low
The purpose of this rule is to avoid getting caught on the wrong
side in a short retrace of a strong trend. This rule is more effective
after the first hour high and low are in.
1. 5 point initial stop
2. Move stop to breakeven when in the money by 5 points.
1. Unless one of the following rules occurs first, exit will be
upon cross of MACD in opposite direction of current trade.
2. Once you are able to move stop to break even and trend appears
solid, ignore all other exit rules, including trailing stops, and
let exit be determined by breach of last swing high/low. This applies
until stochastic is well into overbought/over sold area (80/20),
at which time trailing stops should be considered, particularly
is macd divergence has appeared on lower time frame.
3.If trend day is occurring or suspected and ADX is over 40, trader
has discretion to use cross of 5ema over 8sma for exit and ignore
all other possible exit signals. (I prefer to view the a lower time
frame than the one traded to look for this cross. C an also use
stochastic cross as exit trigger.
No matter what any other rules say, if it seems like a really dumb
idea, don't do it.
- this system was superceded by Jimmer's 2X and 2X-lite, but there's
still some real good stuff in the charts and files below
ftp connect failed