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4 Hour Strategy (MACD)

  • #5,721
  • Jul 12, 2007 5:42am Jul 12, 2007 5:42am
Hi...,

Any one see head and shoulder at MACD GBP USD?

I got stopped at my BE in my previous trading...
I consider entry again if MACD really make head & shoulder pattern.
The price within range today, which made me nervous too.

Any suggest?

Thanks
  • #5,722
  • Jul 12, 2007 6:49am Jul 12, 2007 6:49am
I tried to back test this but I keep getting this error message :

2007.07.12 14:40:59 2006.07.13 04:00 MACD coloured H4 EURUSD,H4: unknown subwindow number -1 for ObjectCreate function


Anyone knows why?

I haven't got even 1 trade done with this EA.
  • #5,723
  • Jul 12, 2007 7:27am Jul 12, 2007 7:27am
Quoting Ryurina
Hi...,

Any one see head and shoulder at MACD GBP USD?

I got stopped at my BE in my previous trading...
I consider entry again if MACD really make head & shoulder pattern.
The price within range today, which made me nervous too.

Any suggest?

Thanks
Hello Ryurina.

I saw the HS pattern too but I don't know if I saw too late. The pattern started to form at 8am EST... 2h ago.

The average daily range is 79 pips and it already moved 88 pips.
I am in serious doubt if I should enter in cable.

I don't know but maybe Euro and Swissy are forming good entry patterns too.

Thanks!
Samuel
  • #5,724
  • Edited 8:08am Jul 12, 2007 7:37am | Edited 8:08am
Quoting Ryurina
Hi...,

Any one see head and shoulder at MACD GBP USD?

I got stopped at my BE in my previous trading...
I consider entry again if MACD really make head & shoulder pattern.
The price within range today, which made me nervous too.

Any suggest?

Thanks
Hi Ryurina,

I wouldn't call it a H&S but a TC signal (b/c second shoulder is not very visible).

I took it though at 16.00 (GMT+1) at the price 2.0300. My reasoning:
1. previous candle was a bearish engulfing one
2. price was just bellow the 8 ema, so it should continue its way to the 21 ema
3. MACD signal
4. it bounced back the second time from the resistance

Against the trade:
1. it is a counter-trend trade
2. s/l is quite far away (to counteract this I used the method Philip mentioned, to spilt the lot)

Hope I am not forgeting anything. Don’t hold back comments.

R

And of course:
s/l: 2.0345 (just above previous candle)
tp: 2.0260 (a bit above the 21 ema)


just have stoped out at breakeven...Don't like counter-trend trades...
Enter Signature
  • #5,725
  • Jul 12, 2007 9:32am Jul 12, 2007 9:32am
At last, i don't enter cable, hik....

Maybe, next time...

But, i'm glad i enter short at Eur Usd when MACD give me reversal signal.

Entry at 1.3772
SL at 1.3800
TP at 1.3747

But, i move my TP at 1.3762, just 10 pips...
Because the price consolidated between 1.3775 and 1.3759

Thank God, after that, the price went up...
If not, i maybe in negatif pips right now...
Btw, 5M Phil's system really help too, even it really different from the 4Hr system.
  • #5,726
  • Jul 12, 2007 9:38am Jul 12, 2007 9:38am
Quoting sgfxtrader
Hi Aristo,

Yup, the MA is up and the current trend is also up. Though the current price level seem to be in trade range, the "mood" of the week is on up trend.

I don't deny that MACD is sloping down, but to trade counter-trend is too risky for me. What I understand is MACD is a momentum signal or 'emotional signal'... which don't work very well in trending but in trading ranges.

I do felt tempted to sell... but the risk is too high at the moment.
a. Counter-Trend trade
b. Counter a Big Body Candlestick on 10 Jul, daily chart

In fact, I could long at 1.3757 as I have seen a double bottom on previous 2 bars and a stop-loss below the double bottom.
So... My push-pull factors to consider a long trade.
+ Double Bottom on previous 2 bars
+ Up trend is in tact
+ Current Price is near weekly upper support.
+ High Volume still transacted for past 2 days.

So I'm waiting for a MACD confirmation (reversal from down) for a trade now.

Well... Let the market speaks to us ya...
Hope others can share how to consider a trade ya.

Hi Sgfxtrader,

Could you explain me about this : "What I understand is MACD is a momentum signal or 'emotional signal'... which don't work very well in trending but in trading ranges"

I don't really understand that MACD don't work very well in trending but in trading ranges...

Thanks
  • #5,727
  • Jul 12, 2007 9:41am Jul 12, 2007 9:41am
Quoting sgfxtrader
Ryurina,

Here is the link. You would need to download skype then click on the link to join.

http://forexfactory.com/showpost.php...postcount=5368

regards

I already download skype, and my id is ryurina
So, what must i do next?

Sorry, if i bother you...
But, i really don't know what to do...
Thanks a lot again...
  • #5,728
  • Jul 12, 2007 10:17am Jul 12, 2007 10:17am
Quoting Ryurina
I already download skype, and my id is ryurina
So, what must i do next?

Sorry, if i bother you...
But, i really don't know what to do...
Thanks a lot again...
Active skype and then enter to this link
http://www.skype.com/intl/en/share/p...wM2vWVFHeCPQs8
  • #5,729
  • Jul 12, 2007 10:37am Jul 12, 2007 10:37am
To Ryurina
I forgot tell you that you must wait Phillip's confirmation to enter but don't worry it is easy to get.
  • #5,730
  • Jul 12, 2007 12:08pm Jul 12, 2007 12:08pm
Hello , today some of us lost some pips on GU and EU short. I want to start off by saying thankyou to Phillip for he just keeps giving and giving. After todays loss. I sat down and wrote down an action plan or check list for every trade. I also would like to thank Richard for his help. i am not trying to make a speech here but just want to share something i believe will help me. Some of you might find this list childish or corny. But someone might benefit from it.

PIPSFORUANDME posted a checklist as well some time ago and this in no way should be compared to hers because she is way out of my league. I can just hope be as good as her some day.
Good luck.
Nadia.

P.S : sorry Palmer i Borrowed your signature line in the end of the document. hope u dont mind.
Attached File(s)
File Type: doc Trade checklist..doc   23 KB | 1,173 downloads
TRADE WHAT YOU SEE... FOCUS ON SUCCESS
  • #5,731
  • Jul 12, 2007 12:51pm Jul 12, 2007 12:51pm
Well done!!. To have a plan is what it is.
  • #5,732
  • Jul 12, 2007 2:16pm Jul 12, 2007 2:16pm
Wow....those are some wackey 4 hour bars. I guess I took a few days off at the right time. Looking at the 4hr EUR$ vs the 4hr $Yen, looks like the $Yen was a little more reliable. Either way, looks like all the majors are facing some sort of major s/r area. This may cause a pause in some of them as they decide which way they want to go. I see a few news releases for the USD tomorrow that may stir things up a bit but, things may be in a range for a while...that's just my two cents. Careful with the short on the EUR$, the weekly looks like it's about to surpass the high from 12/26 2004 and it might keep going....

Still digging in the dirt Donna? Hope your situation is a little more under control. The Police put on one hell of a concert. If anyone has a chance to go, go. If you already have tickets you're in for a good two hours of 'what it use to be like.'
Attached Image
  • #5,733
  • Jul 12, 2007 3:50pm Jul 12, 2007 3:50pm
Hi Ryurina,

Pls forgive me if I may have got you confused. In fact, I am not 100% clear about MACD indicator.

Here are some websites I come to learn about MACD. Hope it helps you, I'm still learning to trade using Phillips' 4hr MACD System, in fact it is very profitable, but as understood not every MACD signal is a trade trigger.

http://www.forex.com/choosing_indicators.html
http://www.investopedia.com/articles...cal/082701.asp
http://stockcharts.com/school/doku.p...uction_to_tech
http://stockcharts.com/school/doku.p..._average_conve

Quote from StockCharts.com about MACD-Histogram - Drawbacks
-- Start Quote -- (Highlighting is mine)
The MACD-Histogram is an indicator of an indicator or a derivative of a derivative. The MACD is the first derivative of the price action of a security, and the MACD-Histogram is the second derivative of the price action of a security. As the second derivative, the MACD-Histogram is further removed from the actual price action of the underlying security.
The further removed an indicator is from the underlying price action, the greater the chances of false signals.

Keep in mind that this is an indicator of an indicator. The MACD-Histogram should not be compared directly with the price action of the underlying security.
Because MACD-Histogram was designed to anticipate MACD signals, there is a temptation to jump the gun. The MACD-Histogram should be used in conjunction with other aspects of technical analysis. This will help to alleviate the temptation for early entry.

Another means to guard against early entry is to combine weekly signals with daily signals. Of course, there will be more daily signals than weekly signals. However, by using only the daily signals that agree with the weekly signals, there will be fewer daily signals to act on. By acting only on those daily signals that are in agreement with the weekly signals, you are also assured of trading with the longer trend and not against it.
Be careful of small and shallow divergences. While these may sometimes lead to good signals, they are also more apt to create false signals. One method to avoid small divergences is to look for larger divergences with two or more readily identifiable peaks or troughs. Compare the peaks and troughs from past action to determine significance. Only peaks and troughs that appear to be significant should warrant attention.

-- End Quote --

So, I come to understand why Phillip shared about EUR/USD using a 20year monthly bar chart.
1. Long Term trend prevails!
2. That's what trend following is about! Following long term trend!

As mentioned before, I am still learning, though I had much real money losses and incredible demo account profits, I have still learning to overcome the emotional attachment with real money. (I made a big loss in EUR/USD for last 2 4hr bars, due to greed)

Oh yes! I stumbled on this and seems like it is a good way to decide whether or not to trade. Hope it helps everyone here too!
http://www.investopedia.com/articles.../03/040903.asp

God bless!

Quoting Ryurina
Hi Sgfxtrader,

Could you explain me about this : "What I understand is MACD is a momentum signal or 'emotional signal'... which don't work very well in trending but in trading ranges"

I don't really understand that MACD don't work very well in trending but in trading ranges...

Thanks
  • #5,734
  • Jul 12, 2007 7:08pm Jul 12, 2007 7:08pm
Hi, i was just looking at Gbp/Usd to see if there is any more room to go up, Well it will depend on the MA and Macd what they indicate, but looking at trend lines 2.0400 + is still in the play.This is a shot of the monthly chart.The red line indicates the 2.400+ price level. The price might reverse from here since price has found resistance as shown by recent candles, and the price did break the 8 MA. But in case there is another TC signal off of 21 here is something to look at, please feel free to comment and tell me if you are looking at things differently. Also interesting to see how a trend line acting as support ( lower trend line in the first wave on left side of the chart) turns into resistance and again as support. It will be very interesting to see if the same trend line turns into resistance one more time when the GBP falls. (whenever that be)
Thanks,
Attached Image (click to enlarge)
Click to Enlarge Name: cable.jpg Size: 73 KB
TRADE WHAT YOU SEE... FOCUS ON SUCCESS
  • #5,735
  • Edited 11:14pm Jul 12, 2007 10:51pm | Edited 11:14pm
Quoting Ryurina
Hi Sgfxtrader,

Could you explain me about this : "What I understand is MACD is a momentum signal or 'emotional signal'... which don't work very well in trending but in trading ranges"

I don't really understand that MACD don't work very well in trending but in trading ranges...

Thanks
Hi Ryurina,

Hope you don't mind if I add to sgfxtrader's reply. The MACD is considered an Oscillator. Oscillators (like RSI and Stochs) work well in ranging environments b/c they can tip you off to oversold and overbought conditions. The MACD differs a little from your traditional oscillator, in that is also an excellent momentum indicator (letting you know how much power is in the directional move). It can be used effectively in a trending environment when you couple it with price action. If you take signals by themselves, the consolidation phase of the trend will look like a countertrend signal, and most likely you will take a loss on your trade. That is where the TC signal works very well...a close above the consolidation high w/TC will let you know that the trend leg has resumed. Oscillators are also good tools for detecting divergences. Don't ever trade a divergence solely b/c it is present (always wait for confirmation that the turn is occurring....divergence can last a very long time and blow out an account easily if traded too soon). Again, this is why it is so important to learn how to analyze your market conditions w/TL's S & R lines, candlesticks, pins, etc....whatever works for you...which has been practiced with, tested and learned!

Hope this helped,

Pips
  • #5,736
  • Jul 12, 2007 11:00pm Jul 12, 2007 11:00pm
Quoting BIL2205
Hello , today some of us lost some pips on GU and EU short. I want to start off by saying thankyou to Phillip for he just keeps giving and giving. After todays loss. I sat down and wrote down an action plan or check list for every trade. I also would like to thank Richard for his help. i am not trying to make a speech here but just want to share something i believe will help me. Some of you might find this list childish or corny. But someone might benefit from it.

PIPSFORUANDME posted a checklist as well some time ago and this in no way should be compared to hers because she is way out of my league. I can just hope be as good as her some day.
Good luck.
Nadia.

P.S : sorry Palmer i Borrowed your signature line in the end of the document. hope u dont mind.
Bil2205,

Nice checklist. Great to see that you have put something together that allows you to develop a trade plan and will help you focus on the market! The trade plan is key...it is equivelent to a business plan...and will help you make sane decisions when placing a trade. You have done a great job, Nadia, preparing something to help you stay focused! Keep up the great work!!

Again, this is aimed at all members of the forum...Don't trash your plan after 1 day. I have found that my trade plan conditions may not be met for 1 or 2 weeks, but then, the conditions are met and a great trade is entered. Remember this system shouldn't be giving you a trade a day and sometimes we have to be extremely patient in waiting for our trades to come to us. I also like to stay flexible. By that, I like to have a plan for both a long and a short trade....What I absolutely must see before going long or short. Patience is executed prior to trading and in the development of our trades.

Happy trading,
Pips
  • #5,737
  • Jul 12, 2007 11:09pm Jul 12, 2007 11:09pm
Quoting BIL2205
Hi, i was just looking at Gbp/Usd to see if there is any more room to go up, Well it will depend on the MA and Macd what they indicate, but looking at trend lines 2.0400 + is still in the play.This is a shot of the monthly chart.The red line indicates the 2.400+ price level. The price might reverse from here since price has found resistance as shown by recent candles, and the price did break the 8 MA. But in case there is another TC signal off of 21 here is something to look at, please feel free to comment and tell me if you are looking at things differently. Also interesting to see how a trend line acting as support ( lower trend line in the first wave on left side of the chart) turns into resistance and again as support. It will be very interesting to see if the same trend line turns into resistance one more time when the GBP falls. (whenever that be)
Thanks,
Hi Nadia,

Cable def. has room to run still...I have the 2.0004ish area too. Always remember that we have no control over how high or low a currency can go. We should consider where it may meet resistance, and if that is broken, not be afraid to trade our plan (if we planned for it). Sometimes I see posts that say XYZ is "DUE" for a fall. Why is any pair due for anything? It makes sense logically, but it doesn't have to do anything. Look at AUD...

Last year I was uncomfortable trading cable in the 1.9000 range...thought it was too high....thought it was "due for a major correction"....thought it wouldn't sustain price, etc. Ha! Look at it now. Just stay focused on your plan and let the market show you how to trade. (oh, this is soooo much easier said than done!)

Keep up the great work! You are doing an awesome job!

Pips
  • #5,738
  • Jul 12, 2007 11:19pm Jul 12, 2007 11:19pm
pips your positivity just shines out!

I am looking at divergence on H4 RSI which, unfortunately does not match that on the macd. What do you think about that, pips?

However I will be putting a small short on cable, looking for a longer term (few days?) drop.
Gone to a better place
  • #5,739
  • Jul 12, 2007 11:40pm Jul 12, 2007 11:40pm
To Phillip & All contributors,

I would like to say thanks for all the sharing, you are all making a positive impact in many people's lives, including mine. I am busy learning the 4-Hour and 5-Minute strategies and gaining a deeper insight daily. For the 1st time in 2 years I feel like I am getting somewhere.

Could you please include me in the Skype public chat rooms too. My username on Skype is: befreenow1

Thanks once again.
  • #5,740
  • Jul 13, 2007 1:09am Jul 13, 2007 1:09am
Thanks Pips and Sgfxtrader,

I'm still have to learn much more...

And i also wait the TC on cable, which right now is starting to make TC signal on 4Hr, on 1Hr chart the MACD is already made TC signal.
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