1300+ times MACD Trading Strategy Backtests Statistics, Surprising!

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Today I will share the statistics of 1300+ times MACD EMA200 backtesting.
This trading strategy is very simple, but The result is quite surprising.
We only trend with trends, and using EMA200 trend line as a filter,
when the price is above EMA200, it is an upward trend, we only trade long,
when the price is below EMA200, it is a downtrend, we only trade short.
then we use the MACD as a trigger to open a position.
When the MACD line crosses the signal line from below, we long.
When the MACD line crosses the signal line from above, we short.
This trading strategy can be used on different time frames to trade stocks or forex,
but it seems to do better on a 30 minutes time frame.
Besides, You should have an exiting plan to protect your money.
Any transaction needs to set a profit-loss ratio.
You can find tools in tradingview.com for profit-loss ratio.
Use a long position as an example, stop loss is placed slightly below the EMA 200 trend line,
or an obvious support line such as a previous swing low.
Use this stop loss in pips as the base to set up the take profit ratio.
Say if your P&L ratio is 1.5 to 1, the stop loss point is 100pips,
then your take profit point is 150pips.
Although everyone is very familiar with the MACD,
But sometimes it might be used in the wrong way.
Before showing you the results, let’s take a look at the principle of MACD,
so that you can use it correctly.
On this chart, you can see the default parameters of MACD are 12, 26 and 9.
This indicator use EMA12 and EMA16 to calculate MACD.
The blue MACD line below is the result of subtracting EMA16 from EMA12.
The orange signal line is the result of a nine-day exponential moving average of MACD
The histogram is the difference between MACD and signal,
which is subtracting the signal line from the MACD line.
It is an indicator of momentum.
If this histogram above the zero axis, it means the price on an upward trend is strengthening.
If it is below the zero axis, it means the downward trend is strengthening.
Generally speaking, when MACD crosses the signal line from below, we buy.
when MACD crosses the signal line from above, we sell.
But if you just trade like this and ignore the trend, you will lose money.
The statistical results later also prove this point.
On Youtube, I saw doing the MACD test first on the Trading Rush channel.
Some other YouTubers do backtests afterward,
I’ll put links to these videos in the video description.
If you are interested, you can go and see for yourself.
Now, let’s look at the statistics. Various data are listed on this table.
These data are collected from all the MACD 100 times backtests on Youtube I can find.
We can see that they use different trading tools, the timelines are different too.
But 15 minutes and 30 minutes time frame are most common.
Most of them have backtested at least 100 times.
Besides, most of them have fixed profit-loss ratio.
This table also lists the number of winners, number of losses, win rate,
profit margin and if they are trading on-trend.
What we care most about in this table is the win rate.
As you can see, the overall winning rate is quite high.
Overall a 52.4% win rate and the profit margin is 23.5%.
The result of trading with this strategy is pretty good.
Note, the win rate of the last video in this table is relatively low.
The profit margin is also very low. There are two main reasons.
First of all, he is not a trending trader,
It’s very common when one uses the MACD with no trending filter.
At the same time, he has no fixed profit-loss ratio.
He uses the MACD crossover for entry and exit signals.
It means he does not control the risk at all.
So his result is the worst among others.

Although the win rate and profit are good,
you should notice this strategy also has blind spots.
Here is an example
You can see the stock price after rose sharply and fell sharply in a short time.
From the overall trend, it still in an upward trend.
Which is the price is greater than EMA200 line.
If you check the MACD, there is a buy signal.
But you will find that the price is at the highest point when the signal is triggered.
So this trading strategy is not suitable when prices fluctuate sharply in a short period.

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If one should understand anything about the stock market, it is this. It is ruled by feelings. Emotions resemble springs, they stretch and agreement, both for just so long. BB’s procedure this like no other indication. A stock, specifically widely traded big caps, with all the essential research study in the world already done, will only lie inactive for so long, and after that they will move. The relocation after such inactive periods will often be in the direction of the total trend. If a stock is above it’s 200 day moving average Stochastic Trading then it is in an uptrend, and the next relocation will likely be up too.

Do not predict – you should only act on confirmation of rate modifications and this constantly suggests trading with price momentum on your side – when using your forex trading technique.

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Keep your stop well back up until the pattern remains in movement. Trail your stop up slowly and beyond typical volatility, so you don’t get bumped out of the pattern to soon.

Currency trading is a way of making cash however it likewise depends upon the luck element. But all is not lost if the traders make rules on their own and follow them. This will not only ensure higher profits but also minimize the danger of greater losses in trade.

With this arrangement, you can trade on your own schedule and exploit rate changes in the market. In common with essentially all aspects of life practice is the crucial to getting all 4 aspects collaborating.

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