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Attachments: 50 +/- MACD 4hour
Exit Attachments

50 +/- MACD 4hour

  • Post #1
  • Quote
  • First Post: Edited at 12:23pm Jun 10, 2007 11:46am | Edited at 12:23pm
My Trading plan 50+/-

This is were I will develop my trading plan.

About

Hello my name is Dean and I have been studying the currency market for 4 years whilst I was an IT student.
I have now finished my degree and are looking for a IT job.
I plan to trade part time from work and have a strategy were I will look for entries at 0800, 1200, 1600 and 2000 hours.

Because I intend to pay for my living expenses from my day job while I compound my profits from my trading activities for at least a year, I need to make quick decisions based on pre determined rules and enter trades based on them. And any position I enter should not be altered in anyway other than being stopped out by hitting a stop loss level.

My trades will be done between 8 am and 8pm GMT(bst)

I will begin by only trading GBP/USD until I am successful and confident in myself to trade other pairs.

I shall be trading Cable because it is very volatile and my back testing shows that my strategy has been profitable in the past.

Chart Setup

I shall have a four hour chart of GBP/USD open with

  1. MACD(5,13,1)

Entries

Check Chart 5 -10 mins before 0800, 1200, 1600 and 2000 and be ready to enter a position.

Entry 0
Basic entries for this system is when the previous 3 MACD signals has a difference of + 50 (long) or -50 (Short)

Explanation of 3 previous Macd Signals.
Example: time is 08:00 a new macd signal has formed Now take the macd number from 20:00 and if there is difference of +/-50 from the 04:00 signal go long/short at 08:00


Exit stratergy


Posistion 1 Set TP at 30 sl at 30
Posistion 2 set TP at 45 sl at 30 (move stop to break even at +30)

Attached Image
I also like to look at chart patterns and use them in conjunction with the macd.

Here is a double bottom with rising macd. The very bullish candde before the doji gave the +50 macd. So a buy would of happened on that signal but taking into account the double bottom and rising macd it would of been possible to enter the trade earlier.

In the future I will look for theese types of signal.
Attached Image
Cup and handle

Havnt noticed this much on the 4hour but once price breaks out of the handles resistance line there is usually a good up rally.
Attached Image
Here is a chart of last week. As you can see my trades are closed early not taking the maximum profit. This is because I have calculated my Take profit numbers based on averages and not taking into account chart patterns and trendline breaks.

In The future I may look at higher TP levels for trading in these setups.
Attached Image (click to enlarge)
Click to Enlarge Name: week.jpg Size: 108 KB
This is a unique looking system.

Thanks for sharing it.
Its based on a macd system I saw on the forum. But I wanted something less subjective than macd shapes. So I looked at the profitable shapes and found that the price will move => 30 pips when the last 3 macd signals were was a diffrence of 50 a good majority of the time.
Quoting billbss
This is a unique looking system.

Thanks for sharing it.
I'm a big fan of the macd, thanks for sharing the system Dean - i look forward to it's development.

M
Yorkshire - UK
Dean, What kind of backtesting results do you have with your basic system?

Thanks
Im Currently forward testing this system. But im not currently able to at my machines at all the times nessacary during the week.

Now im happy with my rules ill do a quick backtest for the year so far.

Quoting billbss
Dean, What kind of backtesting results do you have with your basic system?

Thanks
January 2007 Results

2 Posisitons (310)
19 losers
22 winners 53.6%
41 Trades

2 Posistions 1 Loss a Day Rule (295)

It appears thats alot of profit is left on the table with profit taking at +45 a trailing stop may be better but this would be harder to manually backtest.


Also the exit stratergy could be improved. Currently it is only based on a stop loss, but i will look into this further.
we coded something like this on 4hr for change in zero lag macd bars. it was not profitable. i think we filtered moves with heikin ashi as well. it could be profitable by live trading but our EA did not work. I'll post the zero lag macd here and if i find the ea i'll post as well.
Attached File
File Type: mq4 ZeroLag_MACD.mq4   3 KB | 540 downloads
It really is that easy.
Thank you. So does this EA use the previous MACD value or the current one.
Can you elaborate a little on zero lag macd bars please.
Thank you.

Quoting THE FxORCE
we coded something like this on 4hr for change in zero lag macd bars. it was not profitable. i think we filtered moves with heikin ashi as well. it could be profitable by live trading but our EA did not work. I'll post the zero lag macd here and if i find the ea i'll post as well.
Quoting the_guvnor
January 2007 Results

2 Posisitons (310)
19 losers
22 winners 53.6%
41 Trades

2 Posistions 1 Loss a Day Rule (295)

It appears thats alot of profit is left on the table with profit taking at +45 a trailing stop may be better but this would be harder to manually backtest.


Also the exit stratergy could be improved. Currently it is only based on a stop loss, but i will look into this further.
Dean,
Does the (310) and (295) indicate positive pips for the month?
Yes
Quoting billbss
Dean,
Does the (310) and (295) indicate positive pips for the month?
Quoting the_guvnor
Yes
Here's another question-

Let's say I open a trade at 0800.

At 1200 there is a signal for another trade.

Thr trade I opened at 0800 is still alive.

Do I take the new one too?
Presumable the signal is in the same direction. And if i was also in a posistion i wouldnt add to it.
May aim for a higher profit target on the second lot. But would close the first to lock in 30 pips for the day.

Currently up 49 pips so far today.

http://www.forexfactory.com/showthre...=1#post1463497
Quoting billbss
Here's another question-

Let's say I open a trade at 0800.

At 1200 there is a signal for another trade.

Thr trade I opened at 0800 is still alive.

Do I take the new one too?
Hello and thanks for sharing. Just to see that I have it right:

IBFX at 8 am was at -0.00493. At 20.00 it was -0.00668.
Difference is 175, so according to the +/- 50 rule, it was a buy entry.
Is this what you are looking for?
Yes that would be a buy. I dont use the current macd value to make a trade. with the excepetion of preparing a trade in the last minute of a 4 hour period.

But at 8am i would take the final macd value from the 4am time frame and compare it to the previous 8pm one.


Btw My Charts are Gmt(bst) + 1

Quoting ssotiro
Hello and thanks for sharing. Just to see that I have it right:

IBFX at 8 am was at -0.00493. At 20.00 it was -0.00668.
Difference is 175, so according to the +/- 50 rule, it was a buy entry.
Is this what you are looking for?
Quoting ssotiro
Hello and thanks for sharing. Just to see that I have it right:

IBFX at 8 am was at -0.00493. At 20.00 it was -0.00668.
Difference is 175, so according to the +/- 50 rule, it was a buy entry.
Is this what you are looking for?
I believe we should look at the readings at 0400 (not 2000) and 0800 to decide on a trade at 1200.

If I'm wrong, Dean can correct me.
Quoting the_guvnor
Yes that would be a buy. I dont use the current macd value to make a trade. with the excepetion of preparing a trade in the last minute of a 4 hour period.

But at 8am i would take the final macd value from the 4am time frame and compare it to the previous 8pm one.


Btw My Charts are Gmt(bst) + 1
Right, my mistake there. Thanks.
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