238: The new indicator that improves momentum trading signals - Alex Spiroglou
Jun 13, 2024
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Expert Alex Spiroglou discusses the issues with MACD in momentum trading and introduces the MACD-v indicator for more accurate signals. The podcast covers using MACD-v as a regime filter, trend filter, and integrating it with multi-timeframe and multi-factor approaches. Spiroglou also shares tips for incorporating MACD-v into trading processes and the Momentum Lifecycle Roadmap for market conditions.
MACD often provides inaccurate signals in momentum trading due to inherent problems.
The MACD-v indicator improves signal accuracy by overcoming traditional issues and can be used as a regime filter.
Deep dives
MACDV Indicator Introduction
The MACDV indicator was created by normalizing the MACD by volatility to improve its signal generation. The process involved using the MACDV as a momentum indicator to identify high and low momentum situations. This approach allows traders to quantify and analyze divergences in a systematic manner.
MACDV Application in Technical Analysis
The MACDV can be used in technical analysis as a tool to fine-tune existing patterns based on momentum. By examining different market regimes and regimes defined by the MACDV's various ranges, traders can enhance the quality of their trade setups. Additionally, volatility normalization can be applied to a wide range of absolute price indicators for improved analysis.
Regime Filtering and Setup Enhancement
The MACDV can serve as a regime filter for trend identification within different market environments. Traders can use the MACDV's normalization by volatility to determine optimal entry points within trending or ranging markets. By customizing setups based on the MACDV's momentum insights, traders can refine their trading strategies.
Enhancing Trading Processes with MACDV
Integrating the MACDV into a multi-timeframe, multi-factor approach allows traders to leverage its momentum insights across varying market conditions. Combining fundamental macro factors with technical indicators like the MACDV can provide a comprehensive view of market dynamics, enabling traders to make informed trading decisions.
A Bloomberg study discovered MACD is the second most popular indicator after the RSI.
But the MACD has BIG problems.
And in this episode, Alex Spiroglou shares the solution. Here’s what you’ll discover:
The issues with MACD and why it’s often not a good indicator to use in momentum trading,
The updated MACD-v indicator that overcomes all the traditional issues to give more accurate trading signals,
How to use MACD-v as a regime filter, a trend filter, and improve signal accuracy to avoid false divergence signals,
How the Momentum Lifecycle Roadmap provides traders with a comprehensive view of market conditions and potential trading opportunities,
Why a multi-timeframe and multi-factor approach works and how to integrate it with MACD-v,
Tips for integrating MACD-v into your trading process and much more.
Disclaimer:
Trading in the financial markets involves a substantial risk of loss. All content produced by Better System Trader is for informational or educational purposes only and does not constitute trading or investment advice.
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