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I tested FASTER MACD 100 TIMES and it was... Zero Lag MACD Trading Strategy - Forex Day Trading - YouTube
Channel: TRADING RUSH
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Is the Zero Lag MACD better than the regular聽MACD?
Can it make money in the Forex and Stock Market
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Trading? MACD trading strategy is one of the
best trading strategies we have tested on
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the Trading Rush Channel. Some say the Zero
Lag MACD indicator is better than the regular聽MACD
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indicator, because聽it gives entry signals
with no lags. By no lag, I mean it doesn't
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give late entry signals like the MACD indicator.
Since MACD strategy gave a high win rate even
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though it is slow compared to this, why don't
we test the Zero Lag MACD trading strategy
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100 times to find it's win rate, and to see
if it is actually better than the normal MACD
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that most traders use. And at the end of this
video, I'm going to give it a Trading Rush
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Score, to see how it ranks against other trading
strategies. Subscribe to the Trading Rush
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channel and ring the notification bell, because
we have tested many strategies 100 times to
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find their win rates, and you don't want to
miss that.
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Like the name says, MACD zero lag, tries to
reduce the lag from the regular MACD indicator,聽by
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using a zero lag Exponential Moving Average.
Result of this is a faster MACD indicator,
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that gives entry signals way before the normal
MACD signal. This is how the Zero Lag MACD
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looks like, and as you can tell, it is very
similar to the MACD indicator. It will come
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with the histogram, signal line, and the MACD
line, just like the MACD indicator. But if
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you plot Zero Lag MACD and MACD indicator
side by side, you will notice that Zero Lag
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MACD signals are not only early, but they
are way early and sometimes very different
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from the regular MACD signals. In the MACD
strategy you saw on the Trading Rush Channel,
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we took buy signals when the MACD crossover
was below the MACD zero line, and vice versa.
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But Zero Lag MACD signals are so different,
that you are not only taking early MACD signals,
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but are entering at a completely different
signal, where MACD wouldn't have given an
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entry signal. As you can see, here Zero Line
MACD is giving a crossover below the zero
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line, but the MACD indicator is giving it
above the zero line. But this only happens
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if you use the zero line MACD rule. One of
the reasons the normal MACD trading strategy
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got a high win rate, was because聽of the zero
line rule. The zero line rule filters the
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false signals when the market starts to go
sideways.
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Since MACD Zero Lag is similar to the MACD
indicator, and since we want to see if it
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performs better than the MACD strategy, the
strategy rules will remain the same. Buy when
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the MACD line crosses above the signal line,
only if the crossover is below the zero line,
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and the entire candle is above the 200 period
moving average. We are using the 200 moving
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average to find the long term trend direction,
and to filter out some false signals. So similarly,
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Sell when the MACD line crosses below the
signal line, only if the crossover is above
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the zero line, and below the 200 exponential
moving average. In the long setup, stop loss聽is
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below the pullback, and in the short setup,
stop loss聽is above the pullback.
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So after taking 100 Trades with the Zero Lag
MACD trading strategy, here's what I found
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out.聽
Number 1. As you can see in the Trading Rush
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App, the profit graph went up at the start.
The account size went from 10000 to almost
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12000 very quickly. This was because the Zero
Lag MACD gave multiple trade signals in a
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short period of time when there was a slow
upward trend going on, and these all trades
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were won, because聽price made a big move up.
But then, when uptrend on the pair was over,
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the profit graph in the Trading Rush App started
a downtrend. How long did聽this downtrend
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last? Well, you will see in a moment.
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Number 2. It shouldn't be surprising at this
point, that strategies that give many entry
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signals in a short period of time, don't perform
very well. It is true that the MACD zero lag
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strategy gives faster entry signals than the
MACD strategy. But because it gives faster
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entry signals, and because we are using it
as a trend following strategy, it fails to
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show the proper end of the pullback like the
regular MACD strategy does. Look at this chart.
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Here, price is in an uptrend. We know that
because the price is above the 200 period
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moving average. Right now, price is coming
down towards the moving average, or in other
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words, price is giving a pullback in an uptrend.
If you have been watching the Trading Rush
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Channel for a while, you know that the best
place to buy in an uptrend, is near the end
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of the pullback. According to the normal MACD
strategy, the pullback ended, and the long
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entry signal was right here. But the Zero
Lag MACD strategy, gave multiple long entry
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signals, and as you see, they were not as
accurate as the MACD signal.
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The MACD zero lag trading strategy gave some
good entry signals that were聽faster than
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the MACD signals, but in the long term, it
gave many false signals, especially when the
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pullback was big. Because of this, once the
profit graph in the Trading Rush App started聽its
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downtrend, it never really came up.
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And after taking 100 trades with the Zero
Lag MACD strategy, I got a 33 percent approximate
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win rate, which is the worst win rate we have
gotten on the Trading Rush Channel yet. Remember,
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this strategy was tested with a 1.5 to 1 reward
risk ratio, just like other strategies on
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this channel. But it lost 1750 after 100 trades,
and had 7 winning trades in a row, and lost
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9 trades in a row.
So let's give the MACD Zero Lag strategy a
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Trading Rush Score, and see how it ranks up
against other strategies.
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In the win rate category, it gets a 3.3 out
of 10. Faster MACD signals didn't give a better
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win rate than the regular MACD signals, but
didn't even make money in the long run.
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Since MACD zero lag looks very similar to
MACD indicator, and has the same entry conditions,
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it gets a 7 out of 10 in the easy to use category,
just like the MACD regular strategy.
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But in the Reliability category, it gets a
3.3 out of 10, because it gives many false
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signals, and you can actually lose money with
it.
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In the consistent profits category, it gets
a 0 out of 10. The profit graph was consistent,
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in fact, it was one of the most consistent
graphs we have seen on this channel, but instead
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of going up, it went down.
The MACD zero lag trading strategy we tested
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in this video, gives entry signals in the
direction of the trend, but the MACD zero
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lag spams you with entry signals whenever
there is a small upward and downward move
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with low accuracy. Slight momentum drop doesn't
mean a reversal. When the pullbacks are small
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in a strong trend, you will make money, but
when there are bigger pullbacks in a trend,
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MACD zero lag will make you lose money. And
since the trend is not strong most of the
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time, you can lose money in the long run,
just like we saw in the Trading Rush App.
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So it gets a 3.3 out of 10 in the Quality
of Trades category.
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So the overall TR score is聽16.9 out of 50.
And if you come to the Trading Rush Website,
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you will see that the MACD zero lag indicator,
takes the third place from the bottom, just
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below the CCI indicator, and above the RSI
ADX Trading Strategy.
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So that's all! Like the Video if you liked
it. If you want me to test any other indicator聽100
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Times, subscribe聽to the trading rush channel
and ring that notification bell. After all,
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you don't want to risk your money on an indicator
that doesn't work at all. Maybe support Trading
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Rush on Patreon, and see in depth trade analysis.
Thanks for watching.
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