MACD Trading Strategies (Backtest, Indicator, Rules and Settings)
The MACD indicator is a useful tool and seems to work on stock indices. How do you trade with MACD strategy? We find the indicator useful to make MACD trading strategies.
The MACD is an oscillating indicator that can capture both momentum, reversal, and trend. As always, there is no definitive answer on how to use the MACD. Most likely, you will find the best use not mentioned in any books or articles!
We backtest the following MACD trading strategy on the S&P 500:
- Buy on the close when the fast MACD line crosses above the slow signal line (Image 1)
- Sell on the close when the slow signal line crosses above the fast MACD line (Image 1)
This is all there is to it. On the S&P 500, we get the equity curve (Image 2) for the MACD trading strategy
You can find more info about this trading strategy here:
https://www.quantifiedstrategies.com/macd-trading-strategy/
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