Using Corrected MACD Values and Trend Signals as Filters

Summary

The document discusses ways to turn MACD readings into a trading filter. It distinguishes corrected values from filtered values and cautions that the two should not be combined as though they were equivalent, because their values differ. It outlines three possible ways to identify a trend: detect a change in slope, watch for a zero-line crossing, or treat a crossing of the original MACD value as a signal-line event.

A correction-period setting can be adjusted or disabled to display the original MACD value, allowing the user to experiment with the correction. The text suggests that tuning these choices may produce a useful filter, but it provides no specific parameter settings, trading rules, backtest, or performance evidence. It therefore serves as a brief description of indicator configuration rather than a validated strategy; any resulting filter would need independent testing and clear rules for entry, exit, and risk.

Key ideas

• Corrected MACD readings differ from filtered readings and should be treated as distinct values.
• Trend detection can use slope changes, zero-line crossings, or crossings of the original MACD value.
• The correction period can be adjusted or disabled to reveal the original MACD value.
• The document proposes experimentation but provides no tested settings or performance results.
• A MACD filter alone does not specify complete entry, exit, or risk rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.