I bought and now the MACD is moving down, so should I get out?
I get questions like this all the time from new traders who are taking one of the FX Power Courses. They may have bought on a crossover of the MACD, but now the MACD is moving down and they want to know if they should get out of the trade. Of course, I will ask them if they had first identified their risk and placed their protective stop in the market. If they have, then I try to remind them that they are trading the price of the market and not the MACD. Using technical indicators to time your entry is fine, but getting out of the trade early because of the MACD may not be the best way to use these tools. They are lagging in nature, which means they will tell you what has already happened and do not have the ability to predict the future. So if you entered into the trade using a technical indicator, entered your protective stop and target to take profits, then let the trade go. Our profit or loss will depend on where the market is when we exit the trade, not where the MACD is sitting.