sive, can you teach us how to trade MACDp failure. I heard from you that if there is a MACDp failure the market usually reaches the previous lows/high. It has a very nice probability form what i have seen. However, sometimes it does not. One of those I learnt about yesterday with real money. I attached the chart.
It is EUR/USD 30m. The MACDp failure is in red circle. I entered on the top right border of the circle. My reasons were: MACD failure, OP reached and OB. But the market went north despite of it. How could I trade the failure better? What are the general rules? When does this signal fail? Thanks.
RAsto
Well, first of all, stop grabber (i.e. MACDP failure) pattern is a very tricky, especially on lower time frames.
Personally, I look mostly at weekly and daily, because they're more reliable.
Monthly also is OK, but sometimes they lead not to mothly opposite extremes, but to extremes on lower time frame.
Also I suggest that you should not use a stop grabber as a single context for entering the trade. If you take a look at your chart - there are no sell signals, except suspicion stop grabber. Better use them as additional detail in context.
Second, stop grabbers work better on opposite retracements - say, you have thrust up and during pull back to support you see one or two stop grabbers.
That is much better, than your case - when stop grabber bar in a row with whole move up. Other words - stop grabbers under resitances and above the supports are safer.
Usual rule for enter - after confirmation fo stop grabber - wait for retracement to Fib level on lower time frame with the stop beyond of grabber's extreme.
Stop grabber fails if market takes extreme of grabber's bar.