MACD Crossover Strategy

Setup

Setup criteria:

1. Trend filter: Price above 50 EMA (uptrend) for longs; below for shorts. Or ADX above 25 confirming trending market.

2. Zero-line bias: MACD line above zero for longs; below zero for shorts. This filters out counter-trend signal-line crossovers.

3. Signal-line cross: MACD line crosses above the signal line (bullish, for longs) or below the signal line (bearish, for shorts).

Entry rules

Entry rules:

Standard entry: Enter on the candle close after the MACD/signal cross completes. Stop below (longs) or above (shorts) the most recent swing extreme.

Skip if: Trend filter fails (price below 50 EMA for longs), MACD is in the wrong zone (below zero for longs), or ADX is below 20 (range, not trend).

Trade management

Trade management:

Stop loss: Beyond the recent swing low (for longs) or swing high (for shorts). 50 EMA can also serve as a trailing-stop reference.

Target: 1:2 R:R typically. The previous swing high/low or next major resistance/support.

Exit signal: Opposite signal-line crossover. Many traders exit fully on the opposite cross rather than at a fixed R:R.

Pros and cons

Pros: Mechanical rules — easy to backtest. Filters reduce false signals meaningfully. Works as a momentum-confirmation overlay on price action.

Cons: MACD lags price. Whipsaws are common in choppy markets even with filters. The strategy underperforms in low-ADX regimes.

Best pairs: Any liquid major. More context in the forex glossary, or see strategies stacked on real charts in the trading blog.

MACD Crossover Strategy FAQ