Hello Ammar2000a70, yes that is it. When you find a good setup, either a TC, RB, RT or any others with a clear discernible price motion of the market (either trending or ranging), your R:R need to be calculated in relation of the motion of the market.
Exemple, in an uptrend, when the price is above the 89SMA and is trending and reverse to the 21EMA and there is a Trend Continuation Pattern (TC) on the MACD, you can see that you have a good setup to go long. Then, for your R:R, you can use a point under the 21EMA or under the last candle low for your stop loss and a resistance line (either trend line, figure (round number), pivot line or fibonacci level for your take profit. The important point is that the R:R need to be equal or even great than 1:1 so that at a minimum your take profit is equal to your risk.
For a downtrend, you look at things the opposite way.
When you determine that the maket is in an established ranging mode, your draw the main resistance and support trendline from the weekly (even monthly) unto the 4H and you look for high probability trades with Round Bottom (RB) or Round Top (RT) on MACD that are in accordance with the Resistance or support trendline. In these cases, your stop loss can be above the resistance tendline or support trendline (depending the case), a round number if it the case, the 200SMA or 365 EMA if the case, as your stop loss and any of the EMA or SMA in the way for your profit target.
The crucial point, as Phillip as shown us, is to be patient, disciplined and always wait for a high probability trade only after you have made a thorouly analysis of the price motion of the market (where is the current price action in relation to the 89SMA, where it is in relation to the 200SMA, the 365EMA, the 10EMA and very importantly to the 21EMA)? Is the price in an established uptrend (price above the 89SMA with definite bounce from the 21 EMA)? Is it in an established downtrend (price below the 89SMA and definite bounce from the 21EMA)? Is the MACD signal in harmony with the current price motion of the market?
Then, if it is, you need to look to be sure that your R:R is equal or more than 1:1.
I do really think that to be successful in this 4H MACD system or the 5min method is really to (as Phillip have said again and again) is to look at all the PDF files and attachment, listen to all the MP3, read all the posts of both threads and backest by demo trading how the setup look like according to all the above principles.
Phillip is certainely right in saying that this is not a get quick rich system but a mid-term to long-term process of learning, assimilating and implementing the different aspect of this great and extraordinary system.
Sorry for the long e-mail, I think i have too much inspiration.
Hope this will help you Ammar2000a70
All great week-end to all.
Shreem
Exemple, in an uptrend, when the price is above the 89SMA and is trending and reverse to the 21EMA and there is a Trend Continuation Pattern (TC) on the MACD, you can see that you have a good setup to go long. Then, for your R:R, you can use a point under the 21EMA or under the last candle low for your stop loss and a resistance line (either trend line, figure (round number), pivot line or fibonacci level for your take profit. The important point is that the R:R need to be equal or even great than 1:1 so that at a minimum your take profit is equal to your risk.
For a downtrend, you look at things the opposite way.
When you determine that the maket is in an established ranging mode, your draw the main resistance and support trendline from the weekly (even monthly) unto the 4H and you look for high probability trades with Round Bottom (RB) or Round Top (RT) on MACD that are in accordance with the Resistance or support trendline. In these cases, your stop loss can be above the resistance tendline or support trendline (depending the case), a round number if it the case, the 200SMA or 365 EMA if the case, as your stop loss and any of the EMA or SMA in the way for your profit target.
The crucial point, as Phillip as shown us, is to be patient, disciplined and always wait for a high probability trade only after you have made a thorouly analysis of the price motion of the market (where is the current price action in relation to the 89SMA, where it is in relation to the 200SMA, the 365EMA, the 10EMA and very importantly to the 21EMA)? Is the price in an established uptrend (price above the 89SMA with definite bounce from the 21 EMA)? Is it in an established downtrend (price below the 89SMA and definite bounce from the 21EMA)? Is the MACD signal in harmony with the current price motion of the market?
Then, if it is, you need to look to be sure that your R:R is equal or more than 1:1.
I do really think that to be successful in this 4H MACD system or the 5min method is really to (as Phillip have said again and again) is to look at all the PDF files and attachment, listen to all the MP3, read all the posts of both threads and backest by demo trading how the setup look like according to all the above principles.
Phillip is certainely right in saying that this is not a get quick rich system but a mid-term to long-term process of learning, assimilating and implementing the different aspect of this great and extraordinary system.
Sorry for the long e-mail, I think i have too much inspiration.
Hope this will help you Ammar2000a70
All great week-end to all.
Shreem