The Stochastic MACD indicator
Improving technical indicators
Technical indicators are mathematical formulae. The trader community constantly attempts to modify and to improve existing indicators. Their research often results in useful new variants.
The Stochastic MACD indicator is a hybrid between the MACD and Stochastics. The indicator has one very interesting characteristic.
What makes Stochastic MACD signals special?
The signals in the two examples below are unfiltered. NanoTrader can filter the signals for example with a trend filter or a time filter. It is clear in the second example that the buy signals are better than the short sell signals. More than likely this market is in a positive trend.
FREE Newsletter for Traders
New indicators, new strategies... everything you need to know.
You can unsubscribe at any moment.
Register nowBecause the Stochastic MACD is an oscillator, which oscillates between two values, the indicator is shown below the main chart.
Can you spot what makes the signals special?
The signals appear early at the beginning of a new price movement. Many indicators react only later, when the new price movement is already further along. Early precise signals give the trader a good entry price. The more cautious trader has time to consider the entry.
This example shows a short sell signal and a buy signal. It is a 5-minute chart. Both signals are very good trades. Notice how early the signals appear, giving the trader an excellent entry price.
This example shows four buy signals. All four signals are good. Interestingly for the trader, the Stochastic MACD signals often appear early, at the start of the new price movement.
The Stochastic MACD can be used in all markets, on all instruments in most time frames. The indicator is suitable for day trading and swing trading.
The indicator can also be used as a trend filter.
Get started now
Quick and easy account opening
Trade with an award-winning broker.
No monthly inactivity fee
FREE trading strategies and signals.
Unique trading store.
Open an accountConclusion
The new hybrid Stochastic MACD is interesting. The signals appear early. Traders can enter a position at a good price, or they have some time to reflect whether to open a position or not. A good entry price means more profit.
A trend filter is more than likely useful in order to only get signals in the direction of the trend.
The Stochastic MACD indicator in the trading platform
1. Open the chart of the instrument you wish to trade.
2. In the 'WHS Proposals' folder, open the 'Indicators' folder and select the Stochastic MACD.
3. If desired, change the settings in the Designer Dialog window.
4. Activate TradeGuard+AutoOrder or AutoOrder to trade (semi-)automatically.