Triple MACD Strategy For Swing Trading

Before we go into details of the strategy, I need to mention that this is a high-risk strategy and should be tested by experienced traders only. You should never execute a trade without a stop loss and I strongly recommend trading on a paper account.

Let’s get to it. In a nutshell, the triple MACD strategy is a strategy where we add 3 MACDs on a chart and execute a trade based on MACD and Signal line crosses. The strategy works for both scalping and swing trading and we will use it for swing trading here. You can also read the rules for Triple MACD Scalping here.

Setting Up Charts

I will use TradingView and use NASDAQ as a first demonstration. 

Open TradingView chart, change the timeframe to 2 hours and start with adding 3 MACDs on the chart and change the settings to the following:

  • Top MACD: Fast Length 13, Slow Length 21 – I call it an indication
  • Middle MACD: Fast Length 21, Slow Length 34 – I call it a confirmation
  • Bottom MACD: Fast Length 34, Slow Length 144 – I call it a make it rain

Once you’re done, add 4 EMAs to the chart with the following settings:

  • EMA 21 and change color to red
  • EMA 34 and change color to blue
  • EMA 100 and change color to white
  • EMA 144 and change color to gold

Once you’re done, your chart should look like my chart below.

Swing Trading NASDAQ

Now that we have our chart ready, let’s get to the rules of the strategy. 

First off, identify the environment you’re in.

Bears are in charge if the third MACD is below zero line (like on the chart above) and we’re trading below EMA 100 and EMA 144.

Bulls are in charge if the third MACD is above zero line and we’re trading above EMA 100 and EMA 144.

How To Get a Winning Trade

We’re getting to the most important part – how and when to execute a trade.

As you know, we have 3 MACDs. Opposite to scalping, we will start with the third MACD.

Third, MACD is the environment we’re in. If we’re above the zero line, we take longs. If we’re below the zero line, we take shorts. If we go against the environment, all 3 MACDs need to cross shortly after each other.

The first MACD acts as an indication. The indication comes when the MACD line crosses a signal line, and this is where you should get ready to take a trade.

The second MACD is confirmation. You take a trade once the second shows a cross of the MACD line and the signal line. I recommend waiting for a closed candle that confirms the cross. What often happens is that both MACD lines cross, and then we see a minor retracement. I open trade on the retracement.

And once again, the EMAs play an essential role:

  • Bears are in charge if the third MACD is below the zero line (like the chart above), and we’re trading below EMA 100 and EMA 144.
  • If the third MACD is above zero line, Bulls are in charge, and we’re trading above EMA 100 and EMA 144.

The two best setups are:

  • If we reach EMA 100 or 144, we’re in the opposite environment. E.g. if you’d be taking long, you’d have price action going down towards EMA 100/144 and the third MACD would be showing a bullish environment.
  • If we’re taking a trade opposite to the environment and we have all three MACDs crossing after each other.

For S/L and T/P, always aim for a minimum of 1.5RR (risk to reward ratio).

Let’s have a look at examples.

Example of trades

We have two trades on the chart as an example. Once against the environment and once following the environment.

The first trade was against the environment. I did take it because it did follow the rules. All three EMAs closed shortly after, and we moved below EMAs. I’ve stayed in the trade as I expected the EMAs to be retested and then the market to continue to the downside. The trade was excellent 5.8 RR. Why did I place the stop loss there? Have a look at the structure on the left side of the chart.

The second trade did follow the environment. The third MACD was in a bear environment, and the first 2 MACDs crossed for short. On top of that, the market was retesting EMAs. Such an ideal spot. This trade was for 1.5 RR.

NASDAQ swing trading

Results

Verified results will be published later on. If you want, you can check the results of the Triple MACD strategy for scalping here.