If you have been reading up on this blog, you will know that my personal favourite forex indicator is the MACD.
In today forex faq, one of our fellow traders ask about this MACD indicator and he is interested to know if this indicator can help him to make money from forex.
Below is the question
Is MACD the best indicator to use if the goal is to simply trade when a currency is moving in your favor? I know that there are several methods to produce significant cash, but am biased to using indicators to siphon out cash from FOREX.
Indeed the MACD indicator is very versatile and can be used to help you to trade the trend. Basically you can make use of the flipping of MACD histogram as an entry signal for some strategies.
However it is almost impossible to make money from MACD or any indicators without knowing more about the forex market. In order to profit from forex trading, you need to have the understanding of support and resistance, candlestick patterns as well as a feel of the market which usually comes from trading your demo account.
That’s the reason why I often says that you need about 6 to 9 months to be able to make some money from the market. These period of time is when you actually get the feel of the market movement. Recall this, when you first open your forex chart, you have no idea what to do as the movement of the market looks so confusing.
If you have been trading for at least 6 months, your feel of this market is not the same. You can now know what the market is doing, why it is moving up and this is what I call the feel of the market.
In fact, to be able to profit from the market, you need to know how to combine your knowledge of indicators, candlestick patterns, support and resistance and your feel of the market to formulate a winning strategy.
I hope that I have answered your question and do feel free to contact me again if you have any problem.