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4hr MACD - Trade Journal

  • #1
  • First Post: Edited Oct 1, 2008 1:56pm Sep 29, 2008 11:41pm | Edited Oct 1, 2008 1:56pm
*****So........in retrospect, maybe not the best title for this thread. Not a direct link to Phillips 4hr MACD system - just my personal journal*****

Time to start a journal to improve my trade anticipation and planning for the 3 pairs I follow - E/U, G/U and U/J. I follow Phillip's 4 Hour Strategy (http://www.forexfactory.com/showthread.php?t=14630)
Big ups to you Phillip for your huge input in that thread...hopefully one day I will be able to read the market as you do.
  • #2
  • Edited Sep 30, 2008 3:53am Sep 29, 2008 11:54pm | Edited Sep 30, 2008 3:53am
Daily TF: Price @ 103.55 IB (Inside Bottom) level from 26 May. Been rejected twice here on 16/7 and 16/9
H4:
LONG SCENARIO - Price rejection @ 103.55. TARGET = 105.00 (Daily TL and level of last 2 x swing lows on H4 TF.
SHORT SCENARIO - if price moves back up to 105.00 level, look for TC short. This is a bit of a risky trade - price is ranging and it will be a TC within middle of range. Only reason I will consider taking a short is Daily TL resistance and 2 x swing lows acting as resistance. TARGET = 103.55 level

TRADE TAKEN:
Ended up dropping to M15. Don't normally trade this TF, but trying to get more flexible with timeframes. Entry based on nice tail off 103.55 (and it's 2nd test of this level) and MACD divg.
E = 103.87
SL = 103.35 (Risk = 52pips)
TP1 @ 25pips. Hold 2nd lot for 104.90 level.

UPDATE...
3 sisters formed on M15TF (06:45) - good sign for continuing move upwards

07.25: SL2 moved to BE. This is beneath previous 2 swing lows, so it gives price some room to breathe still....

TP2 hit @ 104.90
Avg pips = (25 + 103)/2 = 64
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  • #3
  • Edited 5:24pm Sep 30, 2008 12:10am | Edited 5:24pm
Daily TF: No clear indication on direction. Maybe a retrace back to 21EMA @ 1.4500
H4 TF: Strong support at 1.4330 with 3 x TL's converging
LONG SCENARI0 - move off 1.4330 support (H1 showing nice divg. at moment). TARGET = 200SMA and TL @ 1.4480
SHORT SCENARIO - break of 1.4330 support, return to retest, TC down. Will drop to H1 if this happens. TARGET = 1.4260 IB, then 1.4170 IB

UPDATE...06:00 (H1) candle gives long signal with RB on MACD. Signal candle not that strong...will wait

OUTCOME: Price dropped through TL's - no retrace/retest on H1 to be able to enter a short position
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  • #4
  • Sep 30, 2008 12:21am Sep 30, 2008 12:21am
Daily TF: As per E/U - no real indication on dir'n
H4:
LONG SCENARIO - looking for price to drop to 1.7902 level (prev IB, which price since rejected on 19 Sept) then long signal. TARGET = 1) prev IT 2) 89SMA / 21EMA
SHORT SCENARIO - pullback to 21/89 MA's. TARGET = 1.7902 IB
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  • #5
  • Sep 30, 2008 3:31pm Sep 30, 2008 3:31pm
Quoting BenStevo
Daily TF: As per E/U - no real indication on dir'n
H4:
LONG SCENARIO - looking for price to drop to 1.7902 level (prev IB, which price since rejected on 19 Sept) then long signal. TARGET = 1) prev IT 2) 89SMA / 21EMA
SHORT SCENARIO - pullback to 21/89 MA's. TARGET = 1.7902 IB
So short scenario pulled through. Somehow, despite having it written down I still managed to miss the trade. Even so, would have struggled to set suitable SL though @ 100+pips.

Should also have noticed 2 x tweezer tops that strongly confirmed a short trade. Phillips chart shows nicely (http://www.forexfactory.com/showpost...ostcount=17231):
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  • #6
  • Sep 30, 2008 5:55pm Sep 30, 2008 5:55pm
Weekly: price approaching TL support @ 1.3900
Daily: 30 Oct candle touched 11/9 IB @ 1.4039 and retraced
H4: price approaching IB @ 1.3979
LONG SCENARIO: would like to see price reach 1.3979 level. There is strong momentum down...price may take time consolidate and test the support levels present on all 3 timeframes before moving up. TARGET = 8/21 EMAs and TL @ 1.4260
SHORT SCENARIO: move back up to broken TL and 8/21 EMAs, then TC down. TARGET = most recent IB
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  • #7
  • Edited 4:04pm Oct 1, 2008 12:00am | Edited 4:04pm
Well I was out so missed this setup, but its a great setup:
H4: 2 x candles with tails to topside form tweezer top and fail to close above 106.26 IT level
H1: 2 x tests of H1 IT @ 106.56. 03:00 candle provided the entry with second test of IT and MACD divg (and weak shoulder-head-shoulder pattern).
TARGET = 104.41 (use 104.60 as TP) = prev. IB
...will watch this trade a bit more closely than yesterdays long because:
1) there is no strong resistance on Daily TF - price may struggle to make the full move down and may not move down as quickly as it moved up.
2) 89SMA is sitting right there and may turn into support.

...If live, would set TP1 to 25 and move SL2 to -25 pips. Trail SL2 above h1 candle highs

AFTERTHOUGHTS:
Ok, 20hrs after possible entry and price is still struggling to make a break down. There are a lot of tails to the topside tho, so it looks promising. Am undecided on this one - neither of the candles forming the tweezers managed to close beneath the 89. My thoughts are that maybe this was one to pass on. I anticipated that the 89 might turn into support...there are enough good setups without needing to get tangled in the MA's....I think :-)
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  • #8
  • Edited 3:58pm Oct 1, 2008 1:02am | Edited 3:58pm
- Price in well confirmed downtrend
- no divergence
- anticipation is for price to be drawn down to 11/9 IB @ 1.7538 level

LONG SCENARIO:
- I would want to see price first come down to 1.7538 level.
- will not take 1st bounce off IB due to strong downtrend...wait for momentum to fade and look to enter on 2nd long confirmation

SHORT SCENARIO 1:
- watch for break of H1 TL support @ 1.7800. TARGET = 1.7538 (use 1.7619 D1 IB as actual TP point)
SHORT SCENARIO 2:
- If price retraces back upwards, will be looking for price to find resistance around 1.7993 (prev. IT). Also 8/21 EMA and descending TL level. TARGET = 1.7619

TRADE TAKEN (SHORT SCENARIO 2):
**This trade is a bit high risk for me as I don't have much experience with using 1hr TF to gain early entry in anticipation of H4 TC**
Nice engulfing candle with tail to topside; TL support broken.
Entry on retrace = 1.7805
SL = 1.7868 (10 pips + 3 pip spread above prev. high)
Risk = 63
TP1 @ 25pips
Target = 1.7619

UPDATE:
...TP1 hit
...SL2 moved to -25
...SL2 hit

TOTAL PIPS FOR TRADE = BREAKEVEN

AFTERTHOUGHTS:
Well, this trade ended up being a solid winner.
Can't decide if I'm happy with how I handled this trade or not. Perhaps entry was without enough confirmation, but in its favour:
1) Price was in strong downtrend
2) From my limited (needs more backtesting) experience, when price approaches a significant (a fairly long-term swing high/low) IT/IB, price tends to be drawn into it. There were no intermediate IB's in the way here, so it was a clear run down to the target...worth the risk I think.

SL placement was stupid. Was trying to limit my risk and so placed SL within the danger zone. SL should have been around 1.7885 (10+ pips above high of signal candle).
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  • #9
  • Oct 1, 2008 7:42am Oct 1, 2008 7:42am
That was a nice trade Ben, even if you didn't make anything. You had a high risk/reward ratio, and a nice reverse hammer.
Looked like a nice opportunity to reenter after last 1 Hour candle too.
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  • #10
  • Oct 1, 2008 1:12pm Oct 1, 2008 1:12pm
Thanks Greg,
Was asleep when that 2nd one came up but would definitely have jumped in...all those tails to the topside = good pressure down, and price really does seem to get sucked up/down into those nesting doll patterns with a strange force!

Quoting Hookem28
That was a nice trade Ben, even if you didn't make anything. You had a high risk/reward ratio, and a nice reverse hammer.
Looked like a nice opportunity to reenter after last 1 Hour candle too.
  • #11
  • Oct 1, 2008 2:47pm Oct 1, 2008 2:47pm
EUR/USD UPDATE

Quoting BenStevo
Weekly: price approaching TL support @ 1.3900
Daily: 30 Oct candle touched 11/9 IB @ 1.4039 and retraced
H4: price approaching IB @ 1.3979
LONG SCENARIO: would like to see price reach 1.3979 level. There is strong momentum down...price may take time consolidate and test the support levels present on all 3 timeframes before moving up. TARGET = 8/21 EMAs and TL @ 1.4260
SHORT SCENARIO: move back up to broken TL and 8/21 EMAs, then TC down. TARGET = most recent IB
Long Scenario is now on the cards as price has reached 1.3979 IB (only passed beneath it by 5 pips)
What I like:
1) Tweezer bottoms on 12:00 and 16:00 candles, testing IB level
2) MACD divg on H4
3) Even clearer divg. on H1

- Will place buy order at 1.3990
- SL = 1.3930 (Normally would like SL to be a bit lower near 11/9 IB lows @ 1.3900 level, but I like the tweezer bottoms within 2 pips of each other - should be good resistance)
- May encounter some resistance @ 1.4073 (prev IT level)
- TP1 @ 40pips (have set this bit higher than normal because of volatility, so 40 pips should be an OK target. Also, this is a move off fairly significant IB as is on both D1 and H4 TF and it is at a noticeable swing low (ie. vs. an IT/IB located mid-trend))
- Will not move SL on 2nd lot in order to give price room to move. TP2 @ 1.4200

...If entry order not hit, will track with H1 to look for alternative entry.
Attached Image (click to enlarge)
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  • #12
  • Edited 7:10pm Oct 1, 2008 5:54pm | Edited 7:10pm
Quoting BenStevo
...If entry order not hit, will track with H1 to look for alternative entry.
TRADE ENTERED:
Bought at close of 2nd doji on H1 because:
1) 2 x dojis show indecision
2) price struggling to break H4 tweezer bottom lows
Entry = 1.4009
SL = 1.3955 (20 pips beneath tweezer bottoms)

Only concern is that agressive TL remains unbroken.

Update:
01:20am...damn what am I doing, breaking all my own rules. Exit trade @ BE - should be waiting for TL break. The fear of missing out on the last good trade that will be around for 10 years!!!
02:10am. Ok, gotta be glad that I jumped ship. Price heading south
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  • #13
  • Oct 1, 2008 10:56pm Oct 1, 2008 10:56pm
-price is a mess wth tails up and down. Daily also congested.
-really, price needs to move out of this area and sort itself out
LONG SCENARIO:
-would need to see price drop to previous IB's and show good support for a long trade. TARGET = current IB/consolidation area and 89SMA @ 105.60
-no longs from current position at 89 - too many TLs, MA's and IT's.
SHORT SCENARIO:
-None
Attached Image (click to enlarge)
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  • #14
  • Oct 5, 2008 10:36pm Oct 5, 2008 10:36pm
- There is a lot suggesting that this week will see price return to the topside:
1) Weekly TF: Weeks starting 31/8 and 7/9 both have long tails to the downside touching IB from March 2006. Price currently sitting near these lows.
2) Daily: Tweezer bottoms last week and failure to close beneath 11/9 IB; price divergent
3) H4: Tails testing 11/9 IB; price divergent
4) H1: Descending TL broken; price divergent

LONG SCENARIO:
- watching for price reversal, with failure to break 1.7542 level. PROFIT TARGET = 1.7800 level (1 Oct IT level, which was tested and held strong on 3/10). Beyond this, target is 89 and 200MA's.

SHORT SCENARIO:
- will be very hesitant to go short at this point - too many reasons not too. Will review situation and consider shorts IF price on daily breaks tweezer bottoms.
Attached Image(s) (click to enlarge)
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  • #15
  • Oct 5, 2008 11:22pm Oct 5, 2008 11:22pm
- price is re-approaching 103.55 level which price has tested twice.

LONG SCENARIO:
- move off 103.55 level if price shows weakness. TARGET = 105.11 (prev. IT on both Daily and H4 levels)

SHORT SCENARIO:
- break of 103.55 IB, followed by retrace and entry short wth TC.
Attached Image (click to enlarge)
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  • #16
  • Oct 8, 2008 6:24pm Oct 8, 2008 6:24pm
- Daily TF shows current price @ major IB @ 98.92 level....good possibility for some long trades to show up
- Daily TF IT's/IB's generally seem to be 'coarser' than H4, so will be waiting for confirmation on H4 that support is holding.

LONG SCENARIO:
- waiting for break of agressive TL and 98.92 support to remain intact.
- currently price is definitely struggling to break Daily IB
- TARGET for long trades = 101.60 (use 101.30 to be safe)

SHORT SCENARIO:
- looking for shorts if agressive TL remains intact and 98.92 level broken
- TARGET = 98.00 level (weekly TL)
Attached Image(s) (click to enlarge)
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  • #17
  • Oct 8, 2008 7:06pm Oct 8, 2008 7:06pm
- price has broken down thru resistance barriers (http://www.forexfactory.com/showpost...3&postcount=14). Only evident support now is on weekly TF with major IB from Nov. 05. This is a blunt tool when working with on 4hr tho.

LONG SCENARIO:
- none at this stage. This would be CT and there needs to be good evidence of price weakness AND move off established support.

SHORT SCENARIO:
- TC short, pref. after a retracement back up to TL and IB @ 1.7430.
- TARGET is tricky as there is no nearby IB history to work with. Will watch for yet-to-be formed IB on H4 if price retraces back to 1.7430, or track PA on H1.
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  • #18
  • Oct 8, 2008 8:22pm Oct 8, 2008 8:22pm
- Price has broken up thru 21 and now returned back down too it. Anticipation is a TC long.
- Also, price has consolidated somewhat and formed 1 x higher low (2nd sister). Will we see 3 sisters form?

LONG SCENARIO:
- move off TL support, pref. with price (on H4) failing to close beneath point (2) IB @ 1.3634.
- TARGET = 1.3805 (use 1.3785)

SHORT SCENARIO:
- break of TL support followed by retrace and move down.
- R:R has to be OK to 1.3543 (7 Oct IB which was tested and held on 8th)
Attached Image (click to enlarge)
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  • #19
  • Oct 9, 2008 7:19pm Oct 9, 2008 7:19pm
.
Quoting BenStevo
- Daily TF shows current price @ major IB @ 98.92 level....good possibility for some long trades to show up
- Daily TF IT's/IB's generally seem to be 'coarser' than H4, so will be waiting for confirmation on H4 that support is holding.

LONG SCENARIO:
- waiting for break of agressive TL and 98.92 support to remain intact.
Should have actually entered on H1 as shown. No need to wait for break of TL as R:R was ok up to the TL. Could have left 1 lot open to run to my target of 101.30 which was hit
- currently price is definitely struggling to break Daily IB
- TARGET for long trades = 101.60 (use 101.30 to be safe)

SHORT SCENARIO:
- looking for shorts if agressive TL remains intact and 98.92 level broken
- TARGET = 98.00 level (weekly TL)
Attached Image (click to enlarge)
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  • #20
  • Oct 12, 2008 8:38pm Oct 12, 2008 8:38pm
- Downtrend. Price back @ 21...anticipation is down, filling gap.

SHORT SCENARIO:
- TC off 21; rejection of 1.3662 IT area. TARGET = 1.3461 (use 1.3480)

LONG SCENARIO:
- None: Price is too congested. Would need to see price rise above 21, then drop down before forming TC long. Alternatively, may see price fall to 1.3461 IB before finding support - seems to be pushing for a trade too much - won't take such a trade.
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