The MACDicator Trading System (MAC Trading System) Developed by Erik Hoyer erikhoyer@sbcglobal.net © Copyright 2003 by Macdicator Trading P.O. Box 391293 Mountain View, CA 94039-1293 www.macdicatortrading.com All Rights Reserved July 1, 2002 Version 1 August 5, 2002 Version 2 September 20, 2002 Version 3 November 1, 2002 Version 4 January 1, 2003 Version 5 November 1, 2003 Version 6 Confidential – This report is for your selected personal use only and is not intended for general distribution to all TeleChart TCNet users, TC2000 users, and/or to other stock traders using technical analysis trading software in electronic form, since it is copyrighted and all rights are reserved. This Website and the TCNet MACDicator Club contain the first 12 pages of the 22 page printed copy of The MACDicator Trading System Report, but not the 10 Trading Rules, the 22 General Trading Guidelines, the Trader’s Log, and the Trader’s Log Summary, which are only available in the printed Report. The complete MACDicator Trading System (MAC Trading System) printed Report is available separately by mail for a nominal charge of $25. The 22 page report includes the trading rules of the trading system, the general trading guidelines, the trader's log, and the trader's log summary, all of which are not included in the TCNet MACDicator Club or here on this MACDicator Trading Website. The report also includes an extra loose copy of both the Trader's Log and the Trader’s Log Summary for your stock and option transactions. If payment is made by cash, check, or money order, make the $25 charge payable for the MAC Trading System to Macdicator Trading at the address listed above and include your mailing address. Please also include your e-mail address for any needed communications. If payment is made by credit card, click on the payment button below to make the $25 payment for the MACDicator Trading System (MAC Trading System) Report. The TCNet MACDicator Club contains the first 10 pages of the 14 page printed copy of The MACDicator Momentum Trading System Report, but not the 5 Trading Rules and the 13 General Trading Guidelines, which are only available in the printed Report. This MACDicator Trading Website does not contain the MACMO Trading System. The complete MACDicator Momentum Trading System (MACMO Trading System) printed Report is available separately by mail for a nominal charge of $35. The 14 page report includes the trading rules of the trading system and the general trading guidelines, both of which are not included in the TCNet MACDicator Club. The MACMO Trading System is not included here on this MACDicator Trading Website. If payment is made by cash, check, or money order, make the $35 charge payable for the MACMO Trading System to Macdicator Trading at the address listed above and include your mailing address. Please also include your e-mail address for any needed communications. If payment is made by credit card, click on the payment button below to make the $35 payment for the MACDicator Momentum Trading System (MACMO Trading System) Report. Both the MACDicator Trading System (MAC Trading System) and the MACDicator Momentum Trading System (MACMO Trading System) printed Reports are available together by mail for a discounted nominal charge of $50. The MAC Trading System Report contains general scans and general trading guidelines not contained in the MACMO Trading System Report, which has additional general trading guidelines. If payment is made by cash, check, or money order, make the $50 charge payable for both the MAC and MACMO Trading Systems to Macdicator Trading at the address listed above and include your mailing address. Please also include your e-mail address for any needed communications. If payment is made by credit card, click on the payment button below to make the $50 payment for both the MACDicator Trading System (MAC Trading System) and the MACDicator Momentum Trading System (MACMO Trading System) Reports. A. Background The MACDicator Trading System (nicknamed MAC Trading System) is a complete trend following trading system for position, swing (micro-trend), and day trading. By providing precise rules for interpreting several technical indicators and their signals, it allows the trader to enter and exit during each up or down chart leg on any time frame with considerable accuracy. The MACDicator Trading System (the name is a hybrid of the words 4MACD and indicator) is a combination of the Chris Manning Method, a revised and updated Bob Cummings 4MACD Histogram, and 9 Worden Brothers Indicators. It includes the 4MACD as 1 of 9 buy/sell indicators that are “tuned and timed” for coordinated buy/sell signals. The Trading System has a total of 10 Trading Rules, 7 of which must be met for an actual buy or sell. The MACDicator Trading System (MAC Trading System) incorporates the 4MACD Histogram, which was originally developed by Bob Cummings in May and June 2002 and adjusted in July 2002 with our two suggested improvements. These changes included reordering the color settings from Blue/Yellow/Green/Red to Blue/Red/Yellow/Green for a slightly more accurate color transition at the mid-line or zero line of the histogram and switching from the random Periods of 7,5,4,5 for Blue, Red, Yellow, Green to the same period of 5 for all 4 colors for better balanced color transition changes and bar length transitions. Bob Cummings included both of these changes on his revised 4MACD Settings in August 2002, which are listed in the Daily Worden Report dated August 16, 2002. He has since developed some longer period 4MACD Histograms for longer period trading, which I presently do not use. The MACDicator Trading System includes a further modification that revises and adds symmetry to the Bob Cummings 4MACD settings, which reinforces the minimum 50% yellow buy/sell principle to the 4MACD bars and adds coordinated buy/sell confirmation from all 9 buy/sell indicators (3 buy/sell indicators are in each of the 3 TCNet chart template windows). The 4MACD settings have been revised and made symmetrical. They are updated in the TCNet Chart Template (refer to the middle window settings below), and the following symmetry has been added: Symmetrical differences between the first and last, short and long settings (3,6,6,3), Sequential differences between the short settings (3,4,5), Same differences (9) between #1 and #4 short and long settings, Same differences (2) between the #2 and #3 short and long settings, and Same ratio of the differences of the #2 and #3 longs to the differences of the #1 and #4 shorts (8 to 12 or 2 to 3), which is the same ratio of the differences of the #2 and #3 shorts to the differences of the #1 and #4 longs (4 to 6 or 2 to 3). The resulting revised settings offer optimum symmetrical settings for the 4MACD Histogram for smoother transitions. The MACDicator Trading System (MAC Trading System) is based on this Hoyer Symmetrical 4MACD, 9 Worden Buy/Sell Indicators, and 10 Trading Rules. The trading system also includes 4 additional or auxiliary indicators (OBV, LR, BOP, and VOL), which are included and used only for general price direction assistance. The complete MACDicator Trading System (MAC Trading System) with the Trading Rules, General Trading Guidelines, Trader’s Log, and Trader’s Log Summary are all contained in the printed Report, which includes: • The background on all indicator settings placed on a single chart template • The chart template indicator settings and colors • The general scans to use for stock candidates • The general principles of the trading system • The trading rules of the trading system (not included in TCNet Club or Website) • The general trading guidelines (not included in TCNet Club or Website) • The trader’s log (not included in TCNet Club or Website) • The trader’s log summary (not included in TCNet Club or Website) I wish to give credit to Cary Wyman, developer of the “Fibonacci Overlay” and “Chart Overlay” available at http://www.omniumsoftware.com (further details are under the General Trading Guidelines), for his collaboration and suggested modifications of the MACDicator Trading System, Bob Cummings for his original 4MACD Histogram, and Chris Manning for the use of TSV 16 and RSI 21.1 as trending indicators. I have since revised the RSI 21.1 setting to RSI 21.5, based on testing of the newer separate MACDicator Momentum Trading System (MACMO Trading System). The MAC Trading System printed Report is available separately by mail for a nominal charge of $25. The MACMO Trading System printed Report is available as a separate trading system by mail at $35, and both Systems obtained together are discounted at $50 for both printed Reports at http://www.macdicatortrading.com . The MAC Trading System Report contains General Scans and General Trading Guidelines not contained in the MACMO Trading System Report, which has additional General Trading Guidelines. The MACDicator Momentum Trading System (nicknamed MACMO Trading System) is also a separate and complete trend following trading system for position, swing (micro-trend), and day trading. This Trading System has a total of 5 Trading Rules, 3 of which must be met for an actual buy or sell. It is based on Rate of Change or Momentum and is derived from and based on the separate precursor MACDicator Trading System (MAC Trading System). It is faster by 1 to 3 bars, eliminates many false signals, requires fewer trades, and is a somewhat more accurate trading system. The MACMO Trading System is a bit more complicated, but a slightly more accurate methodology, since it uses 3 coordinated chart templates, instead of a single chart template, as in the case with the simpler MAC Trading System. The 3 chart templates are posted periodically on TCNet as a Note on the daily chart of the S&P 500 Tracking Stock, SPY, the latest ones of which can also be accessed from the TCNet Profile for ErikHoyer.