MACD Crossover on Nasdaq
- Algomatic Trading
- May 30, 2024
- 2 min read
Updated: Feb 1
A Classic MACD Crossover Strategy for Nasdaq 100
The Idea
This is a classic MACD crossover strategy with a tiny twist. The entry signal comes when the two lines cross (and the histogram crosses over 0), and the exit signal is given when the histogram has been climbing upwards for three days in a row. To ensure the market has a decent overall momentum we avoid trades if MACD is at its 20-period highest.
MACD crossovers can be powerful in trading because they pinpoint clear shifts in momentum, letting traders capture bullish moves and exit quickly if signals weaken.
Why is MACD Crossover so popular?
Clear Visual & Numeric Triggers:
The MACD histogram, zero line, and signal line all create easy-to-spot crossover events.
Momentum Confirmation:
Traders don’t just guess a reversal, they wait for momentum to turn positive (or negative) before taking a trade.
Versatility:
MACD Crossovers can be applied to many markets (stocks, indices, forex, etc.) and across various timeframes.
Setup for Backtest
Market: US Tech 100 (Nasdaq 100)
Contract: 1 € per point
Broker: IG
Testing environment: ProRealtime 12
Timeframe: Daily
Time zone: CET
No fees and commissions are included.
Result
Total gain: 5 165.3 €
Average gain: 19.6€
Total trades: 264
Winners: 175
Losers: 86
Breakeven: 3
Max drawdown: –593.7 €
Risk/reward ratio: 1.4
Total time in the market: 6.7 %
Average time in the market: 2 days, 6 hours
CAGR (10 000 € in starting capital): 2.71 %
Entry Conditions
MACD crosses over 0.
MACD is less than its highest 20-period value.
Exit Conditions
MACD is up three days in a row.
Code
ProRealTime
//-------------------------------------------------------------------------
// Concept: MACD cross
// Market: US Tech 100 / Nasdaq
// Direction: Long only
// Timeframe: Daily
// Timezone: CET
// Versions: v.1 | By: Algomatictrading.com | 2024-05-01 | OOS since: 2022-05-01
//-------------------------------------------------------------------------
defparam preloadbars = 500
defparam cumulateorders = false
// POSITION MANAGEMENT
//-------------------------------------------------------------------------
once positionsize = 1
// INDICATORS
//-------------------------------------------------------------------------
m = macd[12,26,9]
// TRADING CONDITIONS
//-------------------------------------------------------------------------
// Long - Enter
// ------------------
cl = m crosses over 0
cl = cl and m < highest[20](m)
// Long - Exit
// ------------------
clx = summation[3](m>m[1])=3
// TRADING ACTION
//-------------------------------------------------------------------------
// Enter
// ------------------
if cl then
buy positionsize contract at market
set stop %loss 5
endif
// Exit
// ------------------
if longonmarket and clx then
sell at market
endif
FAQ
Q: Am I free to use this strategy however I want?
A: Sure! But we're happy if you refer to our website and keep the creator's name in the code.
Q: I'm using another platform, can you write the code in another language?
A: No, sorry. We might add code in more languages later to the website, but until then, we recommend you try ChatGPT or something similar to help you rewrite it.
Q: Why does my backtest look different when I run the code?
A: The strategy might give different backtest results for several reasons, like added spread or fees, the wrong time-zone settings, or that you're using another type of contract.
Q: Will I make money if I run this strategy live?
A: We don't know. We're not financial advisors, we're just traders sharing our ideas.
