Do you use the MACD indicator or MACD Histogram?
Or follow an expert who does?

If you answered “yes”, you may be leaving money on the table without even knowing it. The most recent BackTestingReport uncovered two mistakes that even experts make with the MACD and MACD Histogram.

After independently researching the report, I sent it to the inventor of MACD, Gerald Appel. Here’s what he said:

“You do seem to have come pretty much to the same conclusions that our research staff has. Most of what you see regarding MACD was arrived at before 1990 by which time I was already advising audiences not to await crossings.”

Mr. Appel is the president of Signalert with hundreds of millions in assets under management, and he has a research staff. If you don’t have quite those resources - or even if you do - you might consider a small investment in an easy-to-read research report.

When you read the MACD Buy Signals Report, you will get an idea how much it cost US stock market participants who waited for MACD lines to cross before buying a stock. Not only that, you will be clued in to a second costly mistake, this time with the MACD Histogram. This one is so widespread, you’ll run into it even on Yahoo Finance charts.

Finally, you get critical data to decide how best to use MACD for your own gain.

Click here to order your report today

Tags: backtesting report, indicator, linkedin, MACD, MACD Histogram, macdh

Click here to download the first issue of BackTesting Report free without registration.  

BackTesting Report helps you make rational investment and trading choices by giving you the results of rigorous testing of popular technical strategies.    It gives you the data without all the effort of backtesting yourself.

Excerpts from the report:

“Establishing a baseline of market behavior helps you tell if a strategy is doing well for good reason or if it’s just plain lucky.   For example, it may initially sound great to have an entry strategy that wins 55% of the time.   But if our baseline test wins 60% of the time, that entry doesn’t look so good anymore.   Likewise, a win rate of 30% might not sound like much, until you learn that the baseline was 25%!    The baseline sets the standard for performance.  This issue is about entry baselines and it focuses on the win rate more than the other statistics.”

…

“This report establishes the baseline for comparison with all other trading strategies.  This is a crucial step because you need a way to tell if a strategy did well when the market just happened to pull it along, or if the strategy really does signal timely entries and exits.    A good baseline shows what happens in the absence of a strategy.    Rather than exercise judgment on when to enter, the baseline strategy always enters when it doesn’t have a position and likewise, always exits after a pre-defined number of days.”

Please share this report as you wish.   You can email it, link to it, reprint it, or blog about it.   Please also include a link back to www.backtestingreport.com   and drop me a line so I can publish a link back to you. Thanks!

The actual link to the document is http://www.backtestingreport.com/BackTestingReportBaseline.pdf 

(This post and the associated document are licensed this under the Creative Commons License, Attribution 3.0. http://creativecommons.org/licenses/by/3.0/us/ .  I am the majority shareholder of Own Mountain Trading Company, the publisher of BackTesting Report. )

Tags: back-testing, backtesting report, baseline, linkedin, technical trading