4 Hour Strategy (MACD)

Hope everyone was able to capture some pips this week!! Was lovely trading the last few days....the type of action we trader's dream about .

Have a good weekend all....time to plan the tactics for next week

Pips

EURUSD as example

Let’s say we take a short entry at A. Basically price is between channel lines going down, at the top of the channel. For this discussion I am only focusing at profit taking targets.

Step 1 of profit taking: Determine possible profit taking targets (any support/resistance levels):

Possible targets are A to G. Stop loss is 30 points away, hopefully 200 ma and top channel line will provide enough resistance.

Level A = 1.3516 (entry)
Level B = 1.3546 (stoploss, -30 points away)
Level C= 1.3484 (32 points away)
Level D = 1.3466 (50 points away)
Level E = 1.3434 (82 points away)
Level F = 1.3400 (116 points away)
Level G = 1.3360 (156 points away)

Step 2: Calculate chances of reaching targets (very subjective) before stoploss is taken out:
Just try to be correct as possible. Think of news coming out in the next few periods, etc. I.e. the further away in time a target is, the less chance there is that it will be reached.

Level C= 1.3484 (32 points away) = 70%
Level D = 1.3466 (50 points away) = 60%
Level E = 1.3434 (82 points away) = 50%
Level F = 1.3400 (116 points away) = 30%
Level G = 1.3360 (156 points away) = 20%

How correct are my estimates for this trade? I have no idea.

Step 3: Calculate the number of points that will be made with ten similar trades:

Level C= 1.3484 (32 points away) = 134 points (7*32) – (3*30) … income - loss
Level D = 1.3466 (50 points away) = 180 points (6*50) – (4*30)
Level E = 1.3434 (82 points away) = 260 points (5*82) – (5*30)
Level F = 1.3400 (116 points away) = 138 points (3*116) – (7*30)
Level G = 1.3360 (156 points away) = 72 points (2*156) - (8*30)

Step 4: Assessment
The first thing we notice, is that our optimal target is Level E = 1.3434
This means we should not trade past this point. Because of the X-factor, i.e. we do not know what is going to happen with the EURUSD and because of taking profits creates positive psychological trading experience; we should take some profits before Level E.

Step 5: Calculating profit taking ratios

Level C = 134/(134+180+260)= 23% of Initial Risk
Level D = 180/(134+180+260)= 31% of Initial Risk
Level E = 260/(134+180+260)= 46% of Initial Risk

Note: This theory assumes you leave your stop loss at 1.3546. These ratios are basically pre-entry targets. Negative unexpected news may come out that nullifies all the pre-entry targets. The MACD may turn around in the middle of your trade, etc.

Hi phillip

Infact I was follow this method of trading more than month and haf .. but I couldnt post any message because of some tech. problems and just they solve it from forexfactory side .. dear is there any change in the methode more than what I read it in the pdf file?

one more thing did any body have a collection of mr.philllip posts with the charts as I am starting to collect them all but until now I havent finished from them all?

Best wishes
ammar

Info

Phillip,

I am now starting to read the entire thread through from the beginning. Wow - quite a lot of great information here. Just wanted to say thanks for all your work and for sharing!

Al

Hello Dear Phillip, thank again for the excellent MP3 that you have made over the week-end. I hope everybody in your family are just fine and I am sending positive thoughts to them.

What a week last week. Lot of momentum in the last 2 days. Certainely uncorfortable for people who do not have enough experience like me. As an exemple and maybe a lesson for others not to repeat, I have entered a trade on the USD/CHF at 16:00 hours GMT + 1 )MIG platform time) on June 6th at 1.2165 and after seeing it not moving for almost 8 hours, I closed it at break even just to see it go to the sky later on.

Great lesson for me that when you feel that your plan was according to the rules and that the price motion was in favor of your trades, I need to relax and stick to my plan.

So, Dear Phillip, I will continue to learn this great 4H method and also your 5 minutes method until it is engraved in my cells and I have the confidence to stick to my plan without fail. Even if it take me another year or 2, it doesn't matter as I really think that your time and devotion that you put to help us is really something worth to work hard on it.

A you said, need to treat this as a business.

BTW, I have put all your MP3 on the 4H and 5 Min on CD and I am listening to them everyday when going to work and when have free time.

Hope everybody will have great trading next week.

P.S. Pips, thank very much for the e-book on the reminescence of a stock operator, a very good reading.

Wishing you all the best

Shreem

Good Job, lokerola! There is so much good info throughout this thread and the time you spend reading previous posts will help you in the long run!!! I love your bicycle quote....gave me a great chuckle, and also made me think about the "general conditions" of when that was written (and how dangerous the bikes were then).

Wishing you all the best on your trading journey!

Hi Shreem,

You are welcome for the e-book...glad you liked it .

I know that I post this an aweful lot...But, I'm going to do it again (repetition is good, right? . I have noticed that many of my really good trades take anywhere from 8 - 12 hours to develop fully. We are trading signals based on a 4 hour chart, and thus we shouldn't expect movements to occur quickly (sure is nice when they do work fast). When you do your backtesting, note the time you entered the trade and the time you exited w/your TP's. This will give you some confidence in letting the trade run. (This is the part of trading I struggle with too, so you aren't alone...Have been working really hard not to meddle w/my decisions until the market proves my analysis was incorrect. And, it is really really hard sometimes, and no, I'm not always very good at following my own advice ).

You also made a great point that can not be reinforced enough: Trading is a business and should be treated as such. Our decisions to enter into the market should be based on sound practices that contribute to our bottom line. Some losses are to be expected, and can be considered as overhead expenses( don't forget to include spread and interest into overhead expense too ). The more we think of this as a true business endeavor and not a hobby, the sooner we will develop skills and business plans that allow our enterprises to flourish.

Thank you for sharing your great thoughts/experiences with the forum. We are all connecting the dots thanks to the efforts of everyone involved in this thread!

Happy trading,

Pips

Only 2 more posts for the day...I promise...

Today's thoughts and musings regard confidence to trust our decisions when trading. If you have done your planning and have gotten the go ahead to enter the trade based on your MACD signal, then enter the trade. Do not second guess yourself based on what others are saying (by others I mean analysts and "spin doctors."). Trust in yourself and your decisions (learn to trust yourself through practice and experience trading your plans).

TamKras is an excellent example of courage in trading (courage is the ability to trust your analysis and execute your plans without questioning why you entered a trade). She plans what her moves will be, waits patiently for the signal to enter, pounces when the time is right and waits for the trade to develop. Her piggy is fat b/c of her patience and discipline to follow her plans. Let's make our accounts fat too....and trust in ourselves and our abilities ....

Happy trading all,

Pips

Phillip,

I'm sending you & your family happy vibes for a good health and happiness:



Friendship, love, laughter and peace.....

Best,

Pips

Thank to you for sharing a lot of your thoughts. Your advises are always very welcome. I will definetely follow your advise in back testing some trades and see how much it took time to develop in a profitable one's following a sound decision based on a diciplined plan. This will certainely help me develop my confidence in letting my trade run according to the rules.

Pips, your absolutely right, with the contributions of Phillip, yourself, Tamkras, Palmer, Alcastro, Golfer, Kun78 and a lot of others on this great forum and also on the 5 minutes forum, it really make a great community for learning these great methods of Phillip.

Certainely, experience with all the rules known by heart through diligent discipline and hard work are keys to success in any endeaviors and certainely in Forex.

Shreem

EUR/USD decided to ignore all EMA's and fell all the way from the downtrend channel top to bottom in two days. It closed slightly above the previous IT 1.3365.

What will come next ? I would wait for another test of channel bottom and watch out for Yen carry revival. Any thought will be welcome.

Hello Phillip. I just wanted to send my best wishes and prayers towards you and your family . And also to thankyou for your dedication towards this system .
And to all my fellow members whom i now consider my co workers i just want to say that i love the beauty of this system that even though i missed the entire move on friday not bec of the system(hehehe) .i am excited about following this system and making some serious pips .
Good Luck to you All!!!!

As you say it yourself it bounced of the channel bottom and the 61.8 fib at 1.3360. On daily chart the stoch has turned up from being oversold. My 2 cents, I would wait for the round price 1.3300 violation before shorting. Right now I am long.

Phillip, I wish you can keep close to your family and take all the time they need. Happy and healthy you and your loved ones be!

Tam

4hour strategy potential of even 3000+ pips per month!

Hi could u please share your parameters for daily stochastic oscillator or any one else using stochastic in conjuction with Phillips metod.
many thanks in advance.

I use stoch for confirmation and take the trade if it is not above 80 or below 20. And I use it at the normal 5,3,3 setting. Notice a bounce from 80, 20 stoch levels is a great confirmation for Phillips' method.

Great work Phillip! I started to read this thread too as I read you 5min method. So ... I noticed that there is one big setup you missed ! Please look in you PDF (post 4335) the chart for Jan 2006 and see below the period of time I am talking about. Everything seems to me like a good setup but you didn't take it. Is there a reason why ? I think it is a +60 pips move, quite important move ..
Thank you.

thanks compsingh for your reply