The Ultimate MACD Strategy You Need to Know

00:00 - Hello, traders! Welcome back to ComLucro! Today, 
we’re diving into a strategy that could make a   real difference in your trading toolkit. We’re 
not just looking at the MACD indicator alone but   exploring how it performs when paired with 
the 200-day EMA and essential price action   levels. This isn’t just about understanding 
an indicator; it’s about crafting a robust   strategy that has helped professional traders 
achieve consistent success in real markets.
00:23 - At ComLucro, our goal is to provide you 
with the knowledge to make informed,   strategic trading decisions. We’re not about 
selling flashy promises or quick wins; instead,   we focus on sharing practical techniques 
that serious, accomplished traders use to   grow their wealth sustainably. We’ve 
condensed these concepts for you,   bringing the most valuable insights 
in the shortest possible time.
00:45 - So, if you’re ready to take your trading skills 
to the next level, stay tuned—some key tips are   coming up that you won’t want to miss. And 
remember, we have other videos covering   different strategies, so be sure to explore those 
and visit our website for even more in-depth   resources. After this brief introduction, we’ll 
jump straight into the details, so stay tuned! Hey traders! If you're looking to level up 
your trading game, give this video a thumbs up,  
01:09 - subscribe to the channel, and hit that 
notification bell so you never miss an update. Before we dive in, we highly recommend checking 
out our playlists on trading psychology and risk   management. These videos can significantly help 
you manage emotions, maintain discipline, and   develop effective risk management strategies—key 
elements for achieving profitability in trading. Please, listen and remember! No amount 
of study to find the perfect trading  
01:35 - strategy will benefit you if you lack 
emotional control during your trades.   If you cannot accept a losing trade and 
keep moving your stop loss, or worse,   trade without a stop loss, you are 
setting yourself up for failure. The efficiency of your strategy is directly tied 
to your risk management and emotional discipline.   Only when a trader understands and implements 
this can they start seeing consistent profits  
01:59 - and end their months in the green. Without these 
critical elements, even the best strategies will   crumble under poor execution and emotional 
decision-making. Now, let's get started! Let’s start with the basics: What is the MACD? The 
MACD, or Moving Average Convergence Divergence, is   one of the most widely used technical indicators 
among traders—and for good reason. At its core,   the MACD helps identify trends in the market 
by analyzing the relationship between moving  
02:29 - averages. It’s a tool designed to highlight 
potential turning points in price action,   giving traders an edge when it comes 
to timing their entries and exits. Now, if you’re an experienced trader, chances are 
you’ve already come across the MACD or even used   it in your trading strategies. But here’s 
the thing: while the MACD on its own is a   solid indicator, it’s not a magic solution. 
Used by itself, it provides decent insights,  
02:53 - but when paired with other tools, its 
performance can dramatically improve.   That’s why it’s essential to stick around for 
the full video, as I’ll show you how combining   the MACD with additional indicators can 
take your analysis to the next level. But before we dive into advanced strategies, 
let’s focus on getting the MACD onto your chart. To get started, head over to TradingView 
or any charting platform you prefer. Locate  
03:15 - the indicators tab at the top of your 
screen, type "MACD" into the search bar,   and select the first option that appears. 
With the MACD now added to your chart,   it’s time to understand how it actually 
works. The MACD consists of four key   components that work together to provide 
insights into market trends and momentum. The MACD is composed of four 
primary elements: the MACD line,  
03:36 - the signal line, the histogram, and 
the zero line. Let’s break these down. First, there’s the MACD line, which is typically 
displayed as a blue line. This line represents   a 12-day exponential moving average (EMA) and 
reflects the shorter-term momentum in price. Then,   we have the signal line, often shown in 
orange, which is a 26-day EMA. This acts   as a smoothing mechanism, helping to identify 
potential crossover points with the MACD line.
04:02 - Next, we have the histogram, which visualizes 
the difference between the MACD line and the   signal line. When the two lines move 
closer together, the histogram shrinks,   and as they move farther apart, it grows. For 
example, when the MACD line crosses above the   signal line, the histogram turns green, 
signaling bullish momentum. Conversely,   when the MACD line crosses below the signal 
line, it turns red, indicating bearish momentum.
04:26 - Finally, we have the zero line, which serves as 
the baseline for the MACD indicator. This central   point helps identify whether the market momentum 
is shifting positively or negatively. Together,   these components provide a clear picture of the 
market’s trends and potential turning points. Now that we understand the four components 
of the MACD, let’s dive into how to use them   effectively. The MACD is incredibly powerful 
for identifying trends in the market. One of the  
04:52 - clearest signals it provides is the crossover 
between the MACD line and the signal line. For instance, when the MACD line 
crosses above the signal line,   it suggests upward momentum, signaling a 
potential trend reversal or continuation   to the upside. On the other hand, when the 
MACD line crosses below the signal line,   it indicates downward momentum, 
pointing to a bearish trend.
05:12 - The histogram adds even more insight by 
showing the strength of this momentum.   If the histogram is growing larger, 
it signals increasing momentum in the   direction of the trend. Conversely, if 
it’s shrinking, momentum is weakening. Here’s how you can use this in practice: To enter a buy trade, look for 
an upward crossover of the lines.  
05:30 - However, this signal is most reliable when 
the crossover happens below the zero line,   indicating a potential bullish reversal.
To enter a short trade, watch for a downward   crossover, but only if it occurs above 
the zero line, signaling bearish momentum.  If the crossover happens on the “wrong” side of 
the zero line—for example, an upward crossover   above the zero line or a downward crossover below 
it—it’s often better to avoid entering a trade.
05:55 - While the MACD is incredibly simple and 
effective, many traders face challenges   because they rely on it in isolation. Combining 
the MACD with other tools or indicators can   significantly improve accuracy and help avoid 
false signals, which we’ll explore next. Let me explain why relying solely on the 
MACD can sometimes lead to problems. The   MACD works exceptionally well when the market 
is trending. For instance, in an upward trend,  
06:19 - the MACD accurately signals when the 
price is likely to continue rising,   making it a valuable tool 
for spotting momentum shifts. However, the challenge comes when the market is 
in a downward trend or even moving sideways. In   these cases, the MACD may still signal a "buy" 
opportunity, even though the price continues   to decline. This mismatch can lead to losses if 
you don’t account for the broader market context.
06:42 - So, how can we fix this? It’s actually 
quite simple: if you’re trading long,   only take trades when the market is 
in an uptrend. Avoid trading against   the trend because the odds will 
almost always work against you. A quick way to determine the market’s trend 
is by adding a 200-day moving average to your   chart. If the price is consistently 
above the 200-day moving average,  
07:02 - the market is likely in an uptrend. 
If it’s below, the market is in a   downtrend. This straightforward adjustment 
can significantly improve the reliability   of your MACD signals and help you trade 
with the trend rather than against it. To set this up, head to the indicators tab 
on TradingView and search for "EMA," which   stands for Exponential Moving Average. 
Select the top option from the list.  
07:24 - Once you’ve added the EMA to your chart, 
click on its settings icon to customize it. Under the Inputs section, 
change the length to 200,   transforming it into a 200-day 
exponential moving average. Next,   switch to the Style tab. You can choose any 
color for the EMA line to make it stand out—We   at ComLucro typically prefer purple or red, but 
feel free to use a color that works for you.
07:46 - Once the EMA is set up, you’ll notice a   single line on your chart. This 
line serves as a trend filter: If the price is above the EMA, it 
signals the market is in an uptrend.  If the price is below the 
EMA, it indicates a downtrend.  This simple visual aid makes it easy to align 
your trades with the prevailing market trend,  
08:05 - significantly improving your trading decisions. Now that we’ve covered the basics, let’s put 
it all together into a powerful strategy. If   you’re going long, the first rule is to only 
trade in an uptrend. Here’s how it works: You place a buy trade when the MACD line crosses 
upward below the zero line, and the current price   is above the 200-day moving average.
This ensures you’re entering trades  
08:25 - only when the market is in an uptrend, 
significantly increasing your odds of success.  For short trades, the process 
is the exact opposite. You enter a short trade when the price 
is below the 200-day moving average,   and the MACD line crosses 
downward above the zero line.  Let’s look at an example. We’d want to take a long 
trade at this point because the MACD lines are  
08:45 - crossing upward below the zero line, and the price 
is comfortably above the 200-day moving average. To manage risk, We at ComLucro 
recommend setting a stop-loss just   below the 200-day moving average. This 
way, the 200-day moving average acts as   a kind of "wall" that the price needs 
to break through to hit the stop-loss,   providing an extra layer of protection. 
For the profit target, t ComLucro,  
09:08 - we generally aim for a 1.5 profit ratio, meaning 
the potential profit is 1.5 times the risk. As shown in this example, the 
strategy worked perfectly,   delivering a clean and profitable result. 
Combining the MACD with the 200-day moving   average creates a robust system for filtering 
trades and improving your overall accuracy. We’ve made money with this strategy, but there’s 
always room for improvement. While combining  
09:32 - the MACD with the 200-day moving average 
works incredibly well in trending markets,   it can struggle when price action begins to 
move sideways or loses momentum. For example,   in this scenario, the chart is moving sideways 
with little to no upward momentum. As a result,   the MACD generates several false 
signals, leading to potential losses. If you traded during such conditions, 
chances are you’d lose money. So,  
09:57 - how do we fix this? By adding price action 
to the strategy. Here’s how it works: Identify Key Support or Resistance Levels: 
Look for areas on the chart where the price   has previously bounced or reversed. For 
instance, in this example, the price drops,   hits a support level, and reverses upward.
Wait for the Price to Return to the Same Level:   Once the price revisits this key support or 
resistance, it’s a potential area for a reversal. 
10:22 - Now, it’s important to note that while 
support and resistance are useful tools,   they’re not foolproof. A 
support level that held in the   past might break if the price has 
enough momentum to push through it. To increase confidence in the trade,   this is where the MACD indicator 
becomes essential. Follow these steps:
10:38 - Ensure the price is above the 200-day moving 
average, confirming the market is in an uptrend.  Wait for the price to hit 
the identified support level.  Finally, watch for the MACD lines to cross 
upward below the zero line. This crossover   is your signal to enter the trade, as it indicates 
a potential momentum shift in the price’s favor.  By combining the MACD with 
price action and the 200-day  
10:60 - moving average, you create a strategy 
that is better equipped to filter out   false signals and improve accuracy, even 
when the market starts to consolidate. In conclusion, we’ve developed a comprehensive 
and high-probability trading strategy by combining   the MACD, the 200-day EMA, and key price action 
levels. Start by adding the MACD to your chart   and understanding its components, which will help 
you identify potential trends and momentum shifts.  
11:25 - Next, use the 200-day EMA as a trend filter 
to confirm the market’s overall direction   and eliminate trades that go against the broader 
trend. Finally, incorporate support and resistance   levels to refine your entries and exits, 
especially in sideways or range-bound markets. By combining these three elements—the 
MACD, the 200-day EMA, and key price   levels—you’re building a strategy that 
aligns with the market’s momentum,  
11:49 - enhances trade accuracy, and reduces 
the risk of common trading mistakes. If you found this strategy valuable, share your 
thoughts or experiences with the MACD in the   comments below, or feel free to ask any questions 
about this setup—we’d love to hear from you! Thanks for watching, and we’ll see you 
in the next video here at ComLucro! I hope you enjoyed today's video. If 
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12:35 - helping you make more informed decisions in the 
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