SKE-Labs MACD Trading Strategy
MACD (Moving Average Convergence Divergence) combines trend-following and momentum analysis.
Components
| Component | Calculation | Use |
|---|---|---|
| MACD Line | 12 EMA - 26 EMA | Trend direction |
| Signal Line | 9 EMA of MACD | Entry trigger |
| Histogram | MACD - Signal | Momentum strength |
| Zero Line | Centerline | Bull/bear boundary |
Signals
Crossover
- Bullish: MACD crosses above Signal line → buy
- Bearish: MACD crosses below Signal line → sell
- Record whether a cross occurs above or below zero as context; do not assign strength without validation
Zero Line Cross
- MACD above zero = bullish trend
- MACD below zero = bearish trend
- Cross of zero = trend change confirmation
Histogram
- Growing histogram = increasing momentum
- Shrinking histogram = weakening momentum (often precedes crossover)
Divergence
- Price new high + MACD lower high → bearish divergence
- Price new low + MACD higher low → bullish divergence
Workflow
Get MACD:
get_indicators(indicator_code="macd", symbol=<symbol>, exchange=<exchange>, interval=<interval>)Record zero-line state as one feature; it does not determine direction by itself
Wait for crossover in trend direction. Confirm with histogram growing in direction.
Check for divergence between price and MACD line/histogram
Get candles for context:
get_candles_around_date(symbol=<symbol>, exchange=<exchange>, interval=<interval>, date=<date>)Exit: choose one objective crossover, histogram, price, target, or time rule before entry and test it separately
Evidence and Validation
- Treat the setup as a testable hypothesis, not a prediction. Define thresholds, entry, invalidation, and exit before evaluating outcomes.
- Calibrate on the same instrument, venue, session, and timeframe. Use closed candles and a held-out or walk-forward sample; record every variant tried.
- Include spread, fees, slippage, borrow or funding, partial fills, and latency. Reject the setup when net expectancy is not positive or depends on one narrow parameter.
- Return observed inputs, missing data, cost assumptions, entry, invalidation, exit, and a valid, watch, or no-trade status.
- Research basis: Cross-market studies summarized in the technical-rule evidence show MACD performance varies by market and costs; a crossover is a feature, not an edge by itself.
Key Rules
- A crossover is a lagged price-derived feature; require a separately validated decision rule.
- Test zero-line and higher-timeframe filters for incremental held-out value.
- Treat 12/26/9 as the conventional baseline and record all parameter variants tried.
- Define histogram expansion/shrinkage over a fixed number of closed bars.
- Do not label a crossover confirmation unless its conditional outcome distribution supports that use.
Related Skills
- divergence-trading — multi-indicator divergence framework that includes MACD
- moving-average-crossover — MACD is derived from EMAs; combine for confirmation