In my last blog post about trading with the MACD indicator, I showed you the strategy called the “Hopper”. This is when the MACD Line crosses zero (read that blog post here). It’s a simple MACD strategy for pin-pointing timing for entries and exits when the “Hopper” MACD Line crosses over zero.
Today, I introduce to you the “Pure Hopper”
When trading with the MACD indicator, the “Pure Hopper” is a very cool technique you can use to watch on your 15 Minute time frame charts. Here’s how.
Apply the MACD indicator to a 15 minute chart, and change the settings to 12,200,15. This is going to slow the MACD indicator down, like a long-term indicator, but it will be using short-time frame price data from your 15-minute chart.
Here’s the Strategy
When the market takes off in a trend, this slowed down MACD indicator makes a move over zero and holds that position for days, (yes days!) on a 15-minute chart.
How do you know when the move is over?
The MACD indicator crosses zero going the opposite direction. Below are some examples.
Buy when the MACD Line crosses zero. Sell when MACD crosses back below zero for approximately 370 pips in 5 days.
Sell when the slowed MACD crosses zero. The market has moved 163 pips down over the past 5 days, and still going until MACD goes back up over zero.
“But, what about when the MACD goes up and down over zero and there is no trend?”
Naturally, trends don’t happen every day.
Sometimes the trend activity will produce only a small amount or nothing at all when the whole thing fades back to a range. Remember, everything in price action is either a trend or a range.
When it is a trend, the MACD indicator helps you get the jump on it!