"The 3 Magic Lines Strategy"

[Terliso]

Let me answer first these questions...Julia, don't be confused

Sweet, thanks for that feedback, because I realize now that I didnt read your post correctly and was looking for the weekly MACD historgram to be above zero lol, not the weekly MACD signal lines and their bullish cross.  But while on the subject, do you mind elaborating though on why its important to you that they be above zero when they first crossed?  For example, with GOAM they are now above zero, just didnt cross there......

     

VPHM, CHINA, GIGM, STEC, PTSC, AOB, BCON, AVII, CHDT, CHTR, IIJI, HSOA, PMU, GNBT, AUY

Because I noticed those stocks that has Weekly MACD Bullish Cross -- above zero level, Exactly @ zero level, bounced off at zero level or near @ zero level can also rise for months .... a much safer bet I believe for a medium term trader like me.
As I said on my previous post, it can also be use as a signal for "good earnings ahead" or some big news ahead.

GOAM is not really doing bad you know... I've seen some stocks that has Weekly MACD Bullish Cross from negative 1.00 and straight up to positive 1.00 and even more.

I'd like to follow my 1,2 & 3 from now on, look at DNDN lucky I sold it

Also, now I will add your accumulation/distribution plot with the 80 dma just so that I am follwing the same charts exactly.  BTW, is there anything in particular you are looking at with the A/D lines there?

Don't mind this indicator... I'm just testing this.

[Terliso]

As I said on my previous post, it can also be use as a signal for "good earnings ahead" or some big news ahead.

Tokyopua, noticed the Weekly MACD Bullish Cross on SIGA....If I'm not mistaken the bullish cross was exactly @ zero level

[Terliso]

To check charts to see if they have the 3 magic lines, do u use the daily or weekly.

Julia,
1) I use the daily chart to see if the 3 moving averages is grouping together there & the price should be above the 3 moving averages and the 50sma must come from below like a Golden Cross (see daily chart of SIGA below).

2) The volume should be high also

3) Then I go to weekly chart to see if there is a Bullish MACD Crossover happening, if there is,then the 1, 2 & 3 strategy is complete then I'll trade that stock. for the record, I actually trade SIGA & made 160% profit from it. good trade!

Because the  the weekly and daily charts will reflect the 3 lines in difffernt positions and with different pps's?
As seen with APPI below.

In APPI Daily chart, we see the 3 magics running below the current price.
In APPI Weekly, the lines are in very differnent positions.

True, & the answer to that question is in this thread:
http://www.3stocksonfire.com/trading/index.php?topic=5335.msg58424#msg58424

Also, u prefer to view the MACD on the weekly and not the daily? Why is this?

R u talking about the MACD Lines or the MACD Histogram?
 

Ok..i think i completely confused myself..and most likely u too

This strategy is so magical... no wonder you got confused, just kidding

[AussieTrader]

Multiple applauds Terliso. I think 3 Magic Lines ROCKS!!

So to celebrate I am adding one for you. Check VLNC. Whilst is doesn't quite get all the ticks (weekly MACD has crossed zero line but not signal line cross) we do have big volume and cross through closely clustered 3 magics (with the 50 positioned to cross from below) on a lovely white candle today. A break of $2.25 and $3 area would be the target.

Thanks again for Terliso for the vauable contribution

[Terliso]

Thanks Aussie... I hope everybody find this information useful.... your VLNC looks like a 3 magic candidate too

Well, let me add some too.... TSYS, CRNT, PMU & CALD I have these in the stock picking board
I haven't update them 'cause I got stuck in this 3 magic thread.

All weekly chart:

[Terliso]

Let's piece it together here... 

[Terliso]

BGO still in the process of becoming a 3 Magic Lines Certified... I think it's heading there now

[ScottishTrader]

What about ANGN (I know, a little late now, but still nice  )

[gmarc66]

Thanks for ur replies Terliso.

Sorry, my quotes function doesnt seem to work for me anymore, so i have to copy and paste quotes in.

Quote from: gmarc66 on November 29, 2006, 07:15:22 PM
"Also, u prefer to view the MACD on the weekly and not the daily? Why is this?"


"R u talking about the MACD Lines or the MACD Histogram?"

Huh? Not sure why u r asking me this? I see the MACD lines and the histogram together on my chart, ur charts show the same thing. Am i misunderstanding something?

In regards the MACD lines, does the signal line and the MACD line both have, above, near or the 0 line? I understand that the MACD line does, but the signal line as well?

Again to clarify ad nauseum; So, the 50 ma should be just below the 200ma, approaching a cross. But, does the 200ema  position matter in relation to the other 2 lines ? Can it be below or above  or even inbetween the 50 &200ma's? is latter even possible? lol

Terliso..did u check out the APPI chart, it seems it was a 3magic scenario.

thanks!

julia

[Terliso]

What about ANGN (I know, a little late now, but still nice  )

You got it, scotty

Sorry, my quotes function doesnt seem to work for me anymore, so i have to copy and paste quotes in.

I think you got viruses program in ur computer hard drive..... I recommend saving your files in an external drive & format your computer (young & fresh) & don't forget to install the antivirus too..

Again to clarify ad nauseum; So, the 50 ma should be just below the 200ma, approaching a cross.

Yes... I think that's the best set-up ....& the price should be on top of the 3 moving averages already while the 50sma still approaching a cross.

But, does the 200ema  position matter in relation to the other 2 lines ? Can it be below or above  or even in between the 50 &200ma's?
cross.

** You have to focus on the 50MA not the 200EMA, because obviously 50sma moves faster than the other 2. **

Look at the chart of ANGN below:
--- Sometimes the 50sma can even come from the top & meet the 200ema & 200ma there, we called this a "Bounced off" & the price should be on top of them. (see ANGN chart below)

--- Sometimes the 50sma also from the top & goes in between the 200ema & 200ma, meeting again the 2's & again price should be on top of them. (See daily chart of BGO below).

Terliso..did u check out the APPI chart, it seems it was a 3magic scenario.

Actually it does, it made a good run this morning... did u trade it?



Julia, just follow these 3 steps...you won't get confused.

Combination of these 3 works just fine
1) The 3 moving averages
2) Sudden rise of volume
3) Weekly MACD Bullish Cross -- above zero level, Exactly @ zero level, bounced off at zero level or near @ zero level.



Daily & weekly scale 3 magic lines is the perfect "3 Magic Lines Strategy"
Example: STEC

[gmarc66]

No Terliso, I didnt trade APPI, although i had planned to...i still may, i'm watching it.

Hey...Terliso, I noticed ur birthday is coming up...the Big 28! woo hoooooo...paaahhhhttty!

Happy Birthday...have a great one!.. When is it exactly?

thanks

julia

[PatD]

Interesting thread.
I use moving averages and volume all the time, but  I have not been able to find a way to use MACD effectively. 
One question: what is your indicator that the trade has failed and it must be closed?

[dwest718]

What about NENG?  Does it's price action apply to this thread too?

[tokyopua]

TTP 

I think this fits the criteria, but I would be afraid to buy it here.  Might be a good candidate for STEPS to determine entry.

Terliso, what do you think?

[AussieTrader]

Automatic scan for 3 magic lines.

Hey guys,

I have constructed a very simple scan that basically says:

If the following is true:
• Daily Close for today crosses above 50-day Simple Moving Average of Close for today
• Daily Close for today crosses above 200-day Simple Moving Average of Close for today
• Daily Close for today crosses above 200-day Exponential Moving Average of Close for today

Then display results of US stocks with average daily vol >60K.

Results for today are:
BFLY
CDCOR
EGLF
TAGS

Note: This does not include the MACD weekly cross check (looking at how to do that), that will have to be done manually for now. I am also cross checking how results are affected by changing the number of days look back. Anyway.

I am thinking to add this as a daily scan into the trading sytems board http://www.3stocksonfire.com/trading/index.php?board=37.0 it would be under a sub thread called trading signals.

Feel free to let me know if that is of value to create such a daily scan.

Cheers