different MACD settings for short term trading

[kingsam]

12, 26, 9 is the default for the MACD in eSignal. I was wondering if anyone found a different setting used for short term trading, 1 ,3 or 5 minute charts.

I saw someone used 20,43, 15 for the MACD settings for 1 or 3 minute scalping. why is that?

also, if anyone could give me some reason as to why they use these numbers, I would highly appreciate your help.

thanks in advance,

Sam

attached is a macd file where u can adjust the days

[Doji3333]

Probably because...

it helped him/her define the trend more effectively on the 1~3 minute charts. The thing with MACD is that is lags the market price a bit. So, the way I would suggest using it is as follows...

1. Setup a shorter term MACD for the short term corrections in the market. This would show weakness of the market trend and potential reversals earlier than the LONGER TERM MACD.

2. Setup a longer term MACD to identify the overall market trend and direction. This MACD could be used to identify "which direction" to trade and then using the shorter term MACD for entry triggers/exit triggers - you should be able to scalp pretty well.

Another thing you might want to consider is using the same theory for STOCHASTICs and BOLLINGER BANDS. I like using a 20 and 40 period BB for trends in the market.

I'll try to post a few examples later.

B

[Doji3333]

Here is a chart...

of a new system I'm working on for the hedge funds I develop for. This system uses a combination of technical indicators, price patterns, trend filters, BB expansion/contraction and many other to determine what to do.

It will show you (somewhat) how I use DUAL INDICATORS to identify technical conditions.

For example, the two BB indicators. I use the shorter term for Expansion/contraction, but I use the longer (orange) one for comparison of the shorter term BB. If the shorter term BB range is less than 1/2 the longer BB range, then I consider the market in a contractionary phase and suspend trading (new entry signals).

You can also use this for TRENDS. If both the short and long term BB BASIS values are climbing, then the trend is presumed UP (bullish).

B

[DuaneG]

Hi kingsam,

Here a couple of thoughts to keep in mind as you begin working with different MACD settings. More often than not, the MACD will tend to track certain symbols better than others. I would suggest perhaps running a few search engine queries just get a sampling of settings that other people/ trading clubs/ or companies tend to use. By then applying these different settings to the stocks that you follow, you'll begin to see how the different settings interact with the respective price action for any given stock. Once you find something that you can make heads or tails out of, you can then begin working with different time intervals to see how things change in regards to the indicator. Hope this helps.