4 Hour Strategy (MACD)

This is what my GU looked liked yesterday. Although, I did not make the pips (closed the trade and ran with my tail between my legs - chicken!!) - I too forgot to draw my trendlines. Maybe if I had done it and coupled with Ttitto's fibs would have been a sitter.

I thought the same thing... I've never seen a trend line drawn like pips did - and the one from Nov 2006 is a mystery to me as well...

DGC & Aftab...

Sorry you guys don't like my TL's...They work really well for me and identify patterns that I see...& no, I don't go swing high to swing high...I'm either breaking a pattern or connecting 2 or more points depending if minor or not (usually have 3 points...like my two round bottoms...still 3 touches but I didn't want the candle before b/c it wasn't as conservative as the line I used for breakout. some of the lines Aftab drew had been removed b/c they coincided w/my Blue lines....or weren't important to me b/c price was too far off. Only wanted the two U patterns b/c I wanted to see if price would bounce there later...(it is something I'm studying from encyclopedia of chart patterns )....The Nov. TL was derived from squishing my four hour and looking for @ least two points (usually swings in distance b/c they are easy to see and seem to hold the weight of longer TL) that connected and ended close to current price action....again, I'm finding this extremely predictive for short term trades as the lines seem to hold.

You asked to see my chart....so I shared it...there are many ways to draw minor/major trend lines...only need two points for minor & My Nov. TL had 3 touches where it was support/then became res (additional 2 touches)/and is now sup again....and they are descretionary TL's ....&...they work really great for me as I'm rarely stopped and almost always hit target. Remember, there is more than 1 way to accomplish a task....I know many methods of drawing TL's and eyeballing is my favorite Swing H to Swing L w/swivel is my least favorite (I usually draw it, look it over and remove).

Hey Aftab, how did you alter my chart...that was pretty neat! First time I've seen that done....I think you might be a wizzard!!

Here's the squished chart The arrows are touch points (be careful..don't strain your eyes 2 touches to left of double bottom) Ignore the thick red one going into space...guess I missed removing an old TL (LOL)....and the candle is identified....also the TL's are dark green now...(didn't want you to confuse with my majors that are thick red...) & there is very tiny arrows...it's pretty hard to see...I hope this post explains my logic...which isn't always easy to do....and I hope it doesn't sound icky...because that's not my intention....

Pips

On the subject of planning a trade, I make myself write a "Rationale". I make myself do this neatly, longhand, with a fountain pen, on an A4 sheet. Let me tell you it takes a while!

The list includes key factors such as time, type of trade, currency pair, fundamental analysis (I know - I haven't got a clue, but everyone has to start somewhere), news releases, strategy and so on.

I am not the kind of person who would normally do this. I used to think analysis was boring. However, Forex is exciting enough to allay these misgivings.

I find it helps me a bit. Certainly, when I don't write one I soon realise I should have. Standing next to a roulette wheel and dropping money on the table is exciting but losing is not fun.

You could not have said it better Smikester. I found that it sticks better when you write it down.

What is not written does not exist.

Pips I love your trendlines. After studying Demark it can make your head spin. His method is very good but there is alot to be said for keeping it simple and using your experience of the market flow and drawing your trendlines by "eyeballing" them---especially the longterm ones which are easier to see. By studying yours (Pips) one can really get a flow for where price is going and darn if MACD does'nt give a signal at the top or bottom of one of those trendlines as price action reaches it.(BTL-- good point).
I would dare to say that by using Phillips MACD along with TL's (price action) we have a pretty good idea or high probability of knowing which way price is going. So this brings us to the oft' asked question of SL placement. What really caught my eye in Pips response in her ..."don't like my TL's" post was that HER SL's ARE RARELY HIT. I went back in history on the GBP/USD (which is notorious for it's "TAILS") and placed my S/L below /above the TL---even though the R:R was bad. And darn if those "tails" would spike past where most would place there SL, but most times the spike/tail would approach the TL but rarely go thru it---as if the market memory would not allow it.
Any thoughts ?

Hey Pips... It's not a matter of me not liking your trend lines, I simply don't understand how you drew them. They work, it seems, and that's what's most important, but there seem to be dozens of ways to draw trendlines and all of them involve some subjectivity, so one could literally cover a chart with a mish-mosh of criss-crossing lines. What I'm hoping to do is determine a way to make effective TLs that keep things simple enough so as not to obscure the actual price movement..

Hi DGC,

Good point about the simplicity...this is my thought....

Look back long term on cable...it is notorious for traveling in channels....and it is notorious for returning to old TL. Take your TL tool (I don't use MT4 so I'm assuming your charts are the same as mine as far as functunality). Go to an area where you see a swing low...draw a line that captures 3 touch points and see where it goes for current price. Now your virtual line down to the next swing low...see what price does. Do the same with highs. Do you notice Cable drops in and out of the same areas? It is kind of scary.

The Inside Top concept is basically, take a swing high...draw a horizontal line through the low of the swing are (the "round top")...see what price does in this area over time? It often coincides w/TL and Fibs (I don't use fibs anymore b/c of this)...and they hold.

Also, when I draw TL's I want to see as much price action contained w/in my lines and will almost always have outlier data (a section where price pierces)...the logic behind that is...I'd rather catch 3 or 4 turns than just 1 and I don't believe in over-optimizing historical data. TL's are a simple concept, but not so simple to do (that's where intuition is important...seeing and feeling price action w/out rationalizing it).

If you are trading a shorter time frame (say, 1 hour or less), an aggressive TL is fine w/current price action...a longer term trade needs a longer term view and it is really important to go back and look at the charts and their patterns (especially w/cable....it looks all jagged and as if it has random nature, but it follows it's old lines).

You'll figure out what is best for you. What is good for one trader doesn't always work for another. In anycase....You did a great job last week on your 3 trades and on your review of the one that got stopped.

Wishing you happy trades in the coming week!

Pips

About trendlines.

Hi Dropplan!

Great Job at going back and testing!!!

I really do think the market has memory. It's amazing to go back in time and see how an area of congestion 10 years ago is an area of congestion today! Also, I've been using Tam's nesting dolls (Inside Tops and Bottoms) and have found the areas hold for YEARS and act as support and resistance....Fascinating! As Phillip says, the charts show us the emotion of the market...and emotion is a human trait. Guess times change, but emotion's of people stay consistent and thats what we see in the market.

I took a graduate course on statistical charting analysis when I was an undergrad....and didn't understand 1 word the professor said...yet, looking at the charts one got a feel for what was happening in the data set (in our case price action). I got an "A" in the class without understanding a word of the conceptual mathematics....because I could look at the the chart (eyeball it) and decribe the system/outcome. Guess that's probably what I'm still doing (LOL)!

Hope your head isn't still spinning from Demark!!

Happy Pipping!

Thanks Phillip for your MP3!

That was brilliant -- clarifying S & R vs. TL!

From now on I will refer to S & R Lines instead of minor TL b/c it states what they are so much better!!!

Wow....You are good!!! .

Time to go play now....hope everyone enjoys the rest of their weekend!

Pips

Great Mp3 & visual on trendlines. That really helped me and a picture is worth .......

Thanks so much for sharing your knowledge in this thread. All of mp3 and pdf files are very helpful for newbie like myself. Greatly appreciated!

This contain the original Pdf document.
Read through it and know it by hart.


Never buy into motion. The reason is you see the motion and get excited and buy/sell and then want to decide what the plan should be. You must allready have a plan before you open a position


"I'd rather be "out" of a trade and wishing I was "in" than "in" a trade and wishing I was "out"

In 2 parts

Recognize the Playing field

Decisions and actions of people

Know the rhythm of the Market

Market Motion

How to use the 1 Hour to supprt the 4Hour MACD.

Need Real Player or similar to watch SWF(Shockwave File)

Part 2