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My Boring MACD Trading Strategy Just Hit 71% Win Rate This Month | The Secret Mindset | YouTubeToText
YouTube Transcript: My Boring MACD Trading Strategy Just Hit 71% Win Rate This Month
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Core Theme
This content presents a structured, three-system approach to using the MACD indicator for profitable trading, emphasizing discipline and confirmation over common, less effective methods. It aims to transform how traders utilize MACD by breaking it down into distinct, synergistic strategies for trend following, reversal detection, and trade confirmation.
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There are only 3 ways to use MACD indicator that actually
make money. I call it the MACD Money Map. So forget all the other junk you've seen.
I'm about to give you years of my work in the next 15 minutes.
Let me show you something painful. See all these MACD crossovers? I took every
single one when I started trading. Lost money on 8 out of 10. The problem wasn't the indicator—it was
that I was using it like everyone else uses it. You probably do the same thing right now. You
see the lines cross and you enter. You spot divergence and you guess the reversal. You look
at one timeframe and ignore the bigger picture. Been there, done that, lost money doing it.
Here's what changed everything for me. I stopped seeing MACD as 7 different random
strategies and started seeing it as 3 complete systems. Each system has one
specific job. System 1 catches trends. System 2 catches reversals. System 3 confirms both.
That's it. Three systems. Together, they're absolutely unstoppable.
Real quick—MACD has two lines and a histogram. The fast line, the slow line,
and the bars. When the lines cross, that's a signal. When the bars flip color, that's
momentum changing. That's all you need to know to understand everything I'm about to show you.
SYSTEM 1: THE TREND SYSTEM The first system is the Trend System. This
catches the big moves that run for days or weeks. Part A: The Zero Line Foundation
The Zero Line is your trend compass. Everything starts here.
Here's what most traders see—MACD above zero, so they think "maybe bullish"…MACD below zero, so
they think "probably bearish" They're wishy-washy about it. They take sells above zero. They take
buys below zero. They fight the trend constantly. But here's what I do instead. Above zero equals I
ONLY look for buys. Below zero equals I ONLY look for sells. No exceptions.
The Zero Line is absolute law. Watch this chart with me. Every
time I ignored the Zero Line and bought below it, I lost money. See this buy signal below
zero? Lost trade. This one? Another loser. Now look at these buy signals above zero.
Winner….another winner. My win rate jumped to 60% just by following this one rule.
The market is telling you its bias with the Zero Line. When MACD is above zero,
buyers are in control. When it's below zero, sellers run the show. So stop fighting what
the market is literally showing you. Check this out. Pull up any chart
right now. Look where MACD is compared to zero. That tells you everything. Above? Only look for
longs today. Below? Only look for shorts. This alone will transform your trading.
Part B: The Crossover Entry Now that the Zero Line gives
us direction, crossovers give us exact timing. But first, here's the mistake everyone makes.
You take every crossover. You see the lines cross and jump in immediately. But 80% of
crossovers happen in what I call the "chop zone"—that area right around zero where the
market can't decide what it wants to do. What's really happening in that zone is
the market is ranging, not trending. MACD is flipping back and forth with zero conviction.
You're buying and selling noise. You're trading chop. You're donating money to the market.
The solution is stupidly simple—the Distance Rule. Only take crossovers that happen far
from the zero line. Above 0.5 or below minus 0.5 on most charts. That distance proves the
trend has actual power behind it. Here's the exact technique I use.
When MACD is above zero and you get a bullish crossover above this line,
that's a continuation entry. The trend is strong and getting stronger. When it's below zero and
you get a bearish crossover below minus 0.5 line, that's your short. The downtrend is accelerating.
Look at this chart with me. See this crossover near zero? It’s a bad signal. And this crossover
just above the line. Another fake signal. But check this crossover…that’s a valid
50-pip move. The distance from zero is literally everything.
And here's what separates beginners from people who actually make money—wait 2 or 3 candles after
the crossover before entering. Just wait. This one rule eliminated maybe half of my
false signals. The market needs time to prove the crossover is real, not just a fake move.
This Trend System prints money in trending markets, but the Reversal System I'm about to
show you catches the turns before they happen. This is where it gets really interesting.
Now, the second system is the Reversal System. This catches the major turning points.
Part A: Divergence Detection Let me show you a situation that happens
literally every single day in every market. Price makes a new high. Everyone's buying.
The chart looks incredibly bullish. But there's a hidden warning signal that the
move is about to completely reverse. The problem is price is lying to you.
It's making new highs but it's running out of steam internally. Most traders can't see this
exhaustion until it's way too late. They buy the top and then wonder why they always lose.
What you want is to catch the reversal before it happens, not after you've already lost money.
Here's how divergence works. When price makes a higher high but MACD makes a lower high,
that's bearish divergence. The reversal is coming. Draw a line connecting the price
tops. Draw another line connecting the MACD tops. When they disagree—when price goes up
but MACD goes down—get ready for the reversal. Watch this example. Price making new highs here,
here, and here. But look at MACD. Lower high, lower high, lower high. The engine
is dying while the car is still moving forward. 2 days later….massive reversal. 200 point drop.
The opposite works for bullish divergence. Price makes a lower low but MACD makes a
higher low. That's a bottom forming. The selling is exhausted even though price is still falling.
But wait—divergence alone isn't enough. I lost so much money entering on divergence alone. You need
confirmation. That's where the histogram comes in. Part B: Histogram Confirmation
The histogram is your momentum reader. These bars tell you exactly when momentum is shifting.
Let me show you the three patterns that actually matter.
First pattern—The Flip. See this first green bar after five red bars? That's momentum shifting from
bearish to bullish. You might think it's just one random bar. But watch what happens next. Complete
reversal. The histogram saw it coming. Second pattern—The Shrinking Tower.
Look at these bars getting smaller and smaller. Red bars shrinking? Selling
is dying. Green bars shrinking? Buying is exhausted. The move is running out of gas.
Third pattern—The Zero Bounce. Watch the histogram approach the zero line then bounce away.
The trend just proved it still has power. It's continuing, not reversing.
Here's how you combine them. You spot divergence first—that's your alert. Then you wait for a
histogram pattern—that's your trigger. Divergence plus histogram pattern equals reversal trade.
Look at this trade. Bearish divergence on the 4-hour chart. Histogram showing shrinking green
bars. Then boom—first red bar. That was my entry signal. Caught a 100 pip reversal.
These two MACD strategies will bring you a lot of good trades. But Strategy
number 3 filters out the losers that would have destroyed your account.
So the third system is the Confirmation System. This is your final filter
that keeps you out of trouble. Part A: Triple Timeframe Stack
One timeframe shows you a signal. Three timeframes show you the truth.
Most traders do this completely wrong. You see a signal on the 1-hour chart and take
it immediately. You don't check what the daily is doing. You're flying blind. You're gambling.
Here's what I do instead. I stack three timeframes in a specific order. Daily
tells me the trend—which side of zero is MACD on? That's my bias. 4-hour shows me the setup—is there
a crossover or divergence happening? That's my signal. 1-hour gives me the entry—is the histogram
confirming with a flip? That's my trigger. Real quick—watch this trade setup. Daily MACD
above zero. That means I'm bullish. 4-hour showing a bullish crossover
above. That's my signal forming. 1-hour histogram just flipped
from red to green. That's my entry trigger. That’s a 200 point winner.
The magic is that all three timeframes must agree. If the daily is bullish but the 4-hour is bearish,
I pass. If the 4-hour has a signal but the 1-hour doesn't confirm, I wait.
You don't need to overcomplicate this. Pick your three timeframes using a 4x
multiplier. If you trade the 15-minute, check the 1-hour and 4-hour. If you trade the 1-hour,
check the 4-hour and daily. Simple. Part B: Price Action Confirmation
The final piece is confirming with actual price structure.
Check this out. MACD crossover happening right at major support.
You might think any crossover is the same. But crossovers at support and resistance
levels have a much higher win rate. The key levels matter more than the signal itself.
Now watch this. MACD divergence plus a hammer candle at support. That's
not just a reversal signal—that's a gift from the market. The indicator and price
action are both screaming the same thing. One more example. See this trendline break?
Most traders enter immediately on the break. But I wait for MACD to confirm with a crossover AFTER
the break, not before. That patience saves you from false breakouts that trap everyone else.
The Confirmation System is what separates gambling from trading. You're not hoping anymore.
You have multiple forms of evidence all pointing the same direction.
Now let me show you exactly how I use all three systems every single morning.
The 5-Minute Morning Scan Step 1: Check the Trend. I
look at daily MACD first thing. Which side of zero? That's my bias for the entire day. Above
zero? I'm only looking for buys. Below zero? Only sells. This takes 5 seconds.
Step 2: Find the Setup. I scan for System 1 or System 2 signals. Are there any crossovers far
from zero? That's a trend trade. Any divergence forming? That's a reversal
trade. I mark the best 3 setups on my charts. Step 3: Confirm Everything. Before I take
any trade, System 3 must confirm. Are all three timeframes aligned?
Is price at a key level? Is the histogram confirming? If anything is missing, I pass.
Entry happens at candle close, never mid-candle. Stop goes at the recent
swing high or low. Target is always 2 times my risk. These rules never change.
When price hits my target, I take half off. Move my stop to breakeven on the
rest. Trail the remaining position with the opposite MACD cross. No emotions, just rules.
Here’s a trade. Daily MACD is above zero. I'm only
looking for buys today. That's my bias locked in. There's a crossover on the 4-hour chart happening.
And that's far enough from zero. System 1 is giving me a trend signal.
Checking the 1-hour—histogram just flipped green. That's my entry confirmation.
Price is sitting right at support. That's perfect. Everything confirms. I'm entering here at
the close of this candle. Stop goes below this level. Target at 2R which is 80 points from here.
This is the kind of A+ setup these three MACD strategies find every single day.
You just learned what most traders never figure out.
While they're taking every random MACD signals and losing money, you now have three complete MACD
strategies. The Trend System for riding big moves. The Reversal System for catching major turns. The
Confirmation System for filtering out the garbage. You don't need 20 different strategies. You don't
need more indicators. You just need these three systems working together.
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