hi everybody Alex deoy here from expert Forex and in this video we going to be talking about an indicator that not only finds the best entry into a trend but also finds the best exit out of a trend and on your screen you can see some examples of this where there is the entry into the trend fantastic it stays in the trend right until it stops trending over there then it reenters the trend and gets out of the trend over there same thing over here it enters the trend nice and early and exits nice at
the point where the market starts going sideways so fantastic indicator let's go and see what it's all about so in this video I'm going to explain how the macd and that is the indicator we're going to be talking about works and white produces the best trend entry and and exit signals I'm going to show you some initial automated macd trading robot results and I'm going to show you how you can access the automated set and forget macd trading robot and then lastly I'm going to show you a few of my own secrets that simplifies the
macd trading considerably now just at the bottom of the slide here we say the the macd stands for moving average convergence and Divergence indicator and that's m a c d that's where the macd gets its name from so what is Convergence and Divergence let's go and have a look at that okay so let's have a look at the settings for the macd the macd works with a fast EMA and a slow e EMA so those are the two compon components that it works with and then it has a signal line which I'll explain a little
bit later but essentially the drivers are these fast and slow moving averages and let's go and have a look on on my screen here I have the two moving averages in fact the ones that are shown here the the red one is the four moving average and the blue one is the 13 moving average and there you can see them on the screen and as you can see the signals produced by the macd have produced fantastic results and we're going to have a look at it a lot more than this but I just want you
to understand how the macd is created so what the macd measures is the distance between the fast moving average and the slow mo moving average and that distance can diverge or it can converge and that's where the the secret lies so what happens is let's take this the situation where both of them are at the same place so on the next candle what happens is there's a gap between them between the fast moving moving average and the slow moving average and that is what the macd measures so these bars on the macd measure the distance
between the small the slow moving average and the fast moving average and how does it do that firstly it takes the slow moving average that blue line that you see there and it makes it flat it flattens it so the Blue Line actually becomes this middle line that you see on the macd so it flattens it and then the distance between the red and the blue line becomes the bar that's down here because it's actually very difficult to see this with the eye on the chart so it actually creates bars for you so there's the
bar so the next one is bigger because that's moving away and that's getting so the bars get bigger and bigger and bigger and bigger and bigger and then suddenly they stop what we call diverging so that when the bars are getting bigger it is diverg the the moving average are diverging from each other when it starts getting smaller they start converging on each other so over there you can see the Gap starts getting smaller smaller smaller smaller and then eventually they meet so the macd measures the Divergence and convergence of the moving averages when it's
going up and when it's going down that's all it does firstly let me tell you a story I had I went into a trading room about 20 years ago a a a financial institution that was trading and there were about 20 Traders on the floor I walked past every single Trader every single Trader had the macd on their screens and very soon after that I realized why this is such a powerful indicator because what they've realized is that conventionally what Traders try and do is they try and trade the crossover the price crossover over moving
averages and and and that's one technique of trading uh but the McD indicator has brought a new dimension on that because what it's actually saying is that while the gap between the the indicators the moving averages is diverging it's meaning that the trend is getting stronger and stronger and when they start converging it means the trend is actually dying and getting weaker and weaker and that's when you want to enter your trade it's not when there's a crossover of the moving average and all that you want to enter when the trend is getting exhausted and
that is what the macd indicates it says all right during this phase this trend is getting strong and when it starts going down it's getting exhausted that's when you should enter and that is why this one captures the entry of the trend perfectly but it also then looks at the trend that you've just caught and gives you the same signal to exit so let's see let's let's have a look here so at that point the macd got exhausted we entered the trade there and then it went down it di it converged and in fact on
the bottom end year when when it's going down here it is Con it is diverging again diverging and then there there it started converging again so that's the exit so it gave a trade entry and a fantastic exit and can you see the size of the trend almost a 300 pip Trend that it caught you now this same thing happened here there you can see uh the the you can't see the uh the Divergence that well but there you can see how it started con converging that is where you enter and it's just kept on
converging and then diverging as it crossed over and only when it starts Crossing it starts converging again that's when you exit so this thing gives you entries and exits fantastic so what is this blue line this blue line is basically the signal line so what a lot of Traders then do is they don't look at these actual uh uh bars they say when the when the bars cross over the signal line so this is a signal line so let's have a look so the signal line comes over you can see over there it hasn't entered
yet it only enters when the bars cross over the signal line same thing here it goes down down down down and and it only enters when the bars cross over the signal line so that's the purpose of the signal line and you can make the signal line sensitive like I've got it there at four or you can make it less sensitive if you want to make it 12 uh the the signals will be a little bit later but safer so that is how the macd indicator works it's a fantastic indicator cause of the fact that
it gives you the entry and the exit and it keeps you in the trend you know people would say oh there the trend's over look over there it's over no it says no the we still diverging so stay in it it's only when the conversion happens over there when the moving a when the bars cross over the single line that you then transact okay so now why am I telling you all this because you when you buy a robot you don't want to know all of this stuff you just want to trade the robot now
the secret about robot trading is knowing how your robot trades and and therefore that knowledge will help you firstly discover fantastic set settings to use but it will also help you correct trading that is not working at the moment so that knowledge is actually critical if you want to become an advanced robot Trader so let's have a look at some more examples and here's a a whole lot of examples I'm going to well let me go through them one by one yeah you can see I think this is the one that I showed you just
showed you there the signal line crossed over that was a signal to buy and then it kept you in the trend all the way there's a signal to sell boom and then the same thing happened in Reverse so it goes who stay in the trend stay oh no get out here because the market is starting to go sideways and then it says and then it says okay get in get in again over there where the where the signal line crosses over and then it says okay go get out and go trade in the other direction
over here and then the same thing again it keeps you in that that Trend over there get you out put you into the new trend get you out over here put you into the new trend and so on and so on here's a good example get you in there away you go right down to the bottom get you out over there that's a 430 pip Trend then it gets you into and in fact this is the one that you should it gets you into the trend over there goes out and gets you out over there
and that is a 340 pip room so now I think you've got a good feel of how the signals work there are some uh whoopa signals that can occur like year it it gets you in and out and in and out a little bit too quickly um what you can do there is adjust the blue line if you want or you can even adjust your settings um if you want but certainly these big trends make the losses of the sideway Market a lot less now currently we are trading $300 accounts and as you can see
here all the accounts are nicely positive except these last three and that's going to be the subject of my next video where I go in there and I say okay say how can we change these uh settings with a knowledge of what how The macd Works to be more positive but on the whole you can see some really really positive the that top one is a $500 account so it is also nicely positive Equity is nicely positive so overall this is a robust way of trading and this is the automated macd Trader and here's the
example of the results you can see the floating profits and losses are tiny because this one also the advantage of this one is it trades one trade at a time you enter and and you stay in that trade while it goes up in fact it has positive uh uh uh open trades in most cases in in fact this is a positive one so this is a fantastic EA for us traders that hasn't got any FIFA problem it hasn't got any gearing problems and it is very successful not that and the win rate at at this
stage is around about 65% you can see the peak draw on very very low so that's what's happening at the moment we're going to run this for another three three weeks and then we're going to introduce these accounts to the linking service and we also going to distribute the settings that we will be using in the linking ser service to owners of the tradable macd and here is the tradable macd web page uh a link to this page will be in the description of the video as well as in the commentary of the video and
now we come to the part that is my secret now all of this that I've explained to you may sound very complicated and so on but I had a look at the trading and this is the same chart you've seen ear earlier and I thought how can we simplify this and this the simplification is so simple you're actually going to get a shot simplification is you get the same signals if you focus on the angle of the fastest moving average so let's have a look at what I'm talking about so here we go here's the
the fastest moving is the red one it's coming down look at the angle it's down down down and then suddenly it changes the angle so it's giving the same signal as the macd is at the bottom so there changes the angles then then you just enter and you stay as long as the angle is pointing up then it reaches the point and it starts it changes the angle same signal as the macd gives so you just stay in it while it's pointing down you oh there changes the signal same signal as the macd then it
it it points down again you same signal you just follow the signal until it changes and there it is it changed in the same single as a macd so there's a simplification on macd trading rather than worrying about uh the uh various signals just trade the moving average angle that's all you have to do anyway that's a subject for another video and but it does show you that we get blinded by complex things and we don't see the Simplicity in some trading techniques how simple is that we've gone from a very complicated uh indicator with
all kinds of things to one indicator a moving a fast moving average and just trading the angle of that moving average now I hope you've enjoyed this video I really hope you've learned something about Forex Trading and I've leared about the opportunities out there fantastic indicator is that they are the McD itself and the Simplicity of moving average angles as always links to anything mentioned in this video will will be in the first commentary of the video and also in the description of the video so from me alexo Cheerio just a reminder to join our
expert Forex community of over 30,000 Forex Traders it is free so don't miss out on any new developments a link is in the the description of the video
