I tested the MACD trading strategy 200 times.
Why did I do this?
Well, I have tested the MACD strategy multiple times before, and it got around a 60% win rate.
But I did that test in a mostly trending market.
I used the 200-period moving average to identify the trend direction and continuously took 100 trades without filtering anything else.
In other words, I also took some trades that were in a range or a slow or choppy market, like when the trend was reversing or slowing down.
Since MACD is a trend-trading strategy, I wondered what would happen if I also filtered these slow, choppy, ranging markets by using price action strategies.
Basically, I wanted to see how high the win rate could go if I took trades only in an extremely good market.
Not only that.
I’m also going to test 100 times again in choppy, ranging, and slow markets as well to see how the win rate behaves in an extremely bad market.
So, I took 100 trades in the extremely good market and 100 trades in the extremely bad market.
But how did I filter the good and bad markets?
Well, I looked at many charts, but then I realized that gold had been going in an upward direction on the 1 day timeframe pretty much continuously for multiple years, like from 2002.
So, I decided to take only long trades in this long-term uptrend on the gold USD chart.
Not only that.
To make sure I only took trades in strong upward moves, I added a 9-period exponential moving average to the chart.
I then only took long trades if the price was staying above this 9 EMA on the one-day time frame.
If the price was below this one-day time frame 9 EMA, then I didn’t take the long trade.
Furthermore, I also drew red boxes where the price was ranging, was choppy, or was below the 9-period moving average on the one-day time frame.
I basically filtered every garbage movement that was not trending clearly above the 9-period moving average.
On top of that, I filtered ranging markets using price action methods, like when the price stopped making the higher-swing-high, higher-swing-low uptrend pattern and stayed in a range like this long red box you see here.
I filtered extremely good and extremely bad markets like this, on the 1 day timeframe, from October 2025 to January 2002.
I also took trades in the reverse direction to make testing easier.
So, in the extremely good market test, I only took trades where I didn’t draw the red boxes, and in the extremely bad market test, I only took trades inside the red boxes.
But my actual entry time frame where I took all the trades was 30 minutes.
On this entry time frame, I added the MACD indicator with its default settings.
When the MACD line crossed above the signal line, and that crossover happened below the MACD 0 line, I took a long trade only if the price was also above the 200-period moving average.
I was using this 200-period moving average to see the long-term trend on the 30-minute entry time frame.
I set the stop loss below the end of the pullback of the trend, and I set the profit target at 1.5 times the stop-loss distance.
In other words, I used a 1.5-to-1 reward-risk ratio.
That is because it is the best reward-risk ratio we have found for trend-trading strategies, according to tested data on the Trading Rush channel.
Check it out if you want to learn more.
I’m also going to test many strategies in this series, so get subscribed if you want to see their extreme win rates.
First, I took 100 trades in the extremely good market, and here’s what happened.
Since the MACD trading strategy got a 62% win rate in the previous test, one might think that in an extremely good trending market, the win rate would go even higher.
I mean, MACD is a trend-trading strategy, so if the trend is extremely good, then the win rate should also be extremely good, right?
But no, MACD, even in an extremely good market, only got around a 60% win rate.
Now, don’t get me wrong, a 60% win rate with a 1.5-to-1 reward-risk ratio is really high and really good.
It makes a lot of money in the long run.
But what this extremely good market data tells us is that MACD’s 60% win rate is on the higher end.
It can rarely go above 62 or 65.
So, in other words, you are only going to get a high 60% win rate with MACD if you are also good at identifying the good and bad markets.
If you find it difficult to filter out bad markets, then you will probably get a much lower win rate than what we got in the extremely good market.
But how bad can the win rate get, especially if we take trades only in the extremely bad market?
Well, when I took 100 trades in the extremely bad market, I was kind of surprised.
You see, I have taken more than 100,000 trades in the past with the MACD strategy using bots and scripts.
And it always got around a breakeven win rate when we took trades randomly.
Like, if you don’t know how to filter out the bad market or identify the good market, the MACD strategy will give around a breakeven win rate.
So, before starting this test, I thought that when I took 100 trades in the extremely bad market, I would once again get around a breakeven win rate.
However, I was kind of surprised when it got one of the lowest win rates we have ever seen.
In the testing series, the breakeven win rate with a 1.5-to-1 reward-risk ratio is 40%.
So, this 32% win rate is a really bad win rate.
It can make the profit graph go down continuously, and you will blow up your account in the long run.
But wait a minute, why is the win rate so low when it had a breakeven win rate in the 100,000 trades test?
Well, you see, this time the win rate is so low because I specifically tested a trend-trading strategy in a bad market where there was ranging, slow, and choppy movement.
In the 100,000 test, I didn’t specifically take trades in the bad market. In other words, if you take random trades in both good and bad markets, then the win rate stays near the breakeven point in the long run.
So, this extremely bad market data is telling us that if you cannot filter out ranging, choppy, and slow markets while trend trading, then you will get a much lower win rate.
This is true even though the strategy is one of the best trading strategies in a trending market.
So, today we learned that MACD’s win rate can go as high as around 60% with a 1.5-to-1 reward-risk ratio.
And it can drop to around 30% if you don’t filter out the extremely bad ranging and choppy markets.
If you are decent at filtering out bad markets, then your win rate will probably be around 50%, and you will probably make money.
So, your profit graph will go in an upward direction in the long run.
Now, it’s time to give it the Trading Rush Score, or TR Score.
In the previous 100 times testing series, MACD got the highest win rate and the highest TR Score.
And if we scroll down, we will find that MACD Zero Lag, which was the faster version of the MACD indicator, got the worst win rate of 33%.
And now, in the extremely good market test, I am going to give MACD the same high TR Score of 38.8 because it got the same win rate and gave the same high-quality trades in a good market.
And in the extremely bad market test, since MACD gave the worst win rate, just like the MACD Zero Lag indicator, I am going to give it one of the lowest TR scores of 16.9.
So, MACD in the extremely good market gets one of the highest TR Scores, and MACD in the extremely bad market gets one of the lowest TR Scores.
And since this is an ongoing series, the thing I am interested in finding out, is how many of the previously tested strategies can beat the MACD trading strategy in the extremely good market.
I mean, there has to be at least one strategy that will get a higher win rate in the extremely good market than this, right?
MACD can’t be the king in all kinds of markets, right?
So, let’s find out in the next video.
Thanks for watching.