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4 Hour Strategy (MACD)

  • #5,861
  • Jul 26, 2007 8:44am Jul 26, 2007 8:44am
Hello. I hope u all are doing well. I was looking at Fari's trades, and i am not critisizing but analysing. I've been following Phillip's system for a little over 2 months and still consider myself a NEWBIE, because still learning. ( I have added the pdf of chart at bottom for quick viewing)
Trade#1
This was a counter trend trade. notice that it was taken right on 8ma. counter trades are high risk an even if you want to take it according to your analysis, 8Ma should be your target , not the point to enter.

Trade#2.
again counter trade. Notice the candles before the trade candle. After such a strong bullish move up counter trade is suicide. also the signal candle closed above the previous candle so i dont see any indication for a down move.

Trade#3.
Another counter trade. Price closed right on 21 MA and a trend line, which would be considered support here.From here i would expect a Tc , which came right on the next candle/bar.

Trade#4.
This one is still counter trade but some what decent with 8MA as target since MACD above 45. But look at risk reward. Stop loss would be the trend line above or the high of previous candle. and target 8Ma. i dont know how many pips exactly but visually does not look ok. If your target is 21 MA since macd above 45 then it looks ok.

Trade#5.
counter trend trade. Macd is on the higher side, but price has already closed just above 8MA with a long tail . candle emotion is very important to read as well. price bounced right back in next candle. The short signal after that was more valid if you want to counter trade because small candle closed above 8 ma also trend line above acting as resistance so chances for some consolidation there.

Trade #6.
No comment .,the mistake is soooo evident.
Trade# 7.
counter trade. looks ok now since break out afterwards. but by just looking at it u see resistance at 8 MA. The channel is getting narrower between the trend lines so maybe position for a breakout.

Trade# 8.(i dont trade this pair so will analyse just what i see)
price broke through 89 and 200 and went back to 21 . now chances are that price will bounce again from here down. but look at macd it did not confirm to go short. beacuse price can go thru 21 MA a little bit as well. and that is exactly what happened. So wait for a MACD confirmation because it is a good set up especially since 200 was also crossed and chances for price to test it again are also there.and 200SMA acts as a strong resistance or support as well.

Trade #9.( dont trade this either but here goes)
counter trade. candle not bullish.
Trade# 10.
looks ok because trend continuation.( or maybe i am running out of analysis http://www.forexfactory.com/images/icons/icon12.gif)
Trade#11.
I have no idea why that was taken. if it was thought of as Tc ,it was a little too late. the candle that was taken as a signal is bullish closing close towards 8 ma , not away from it.

Maybe i should have made a PDF of this analysis. but too late for that.http://www.forexfactory.com/images/icons/icon10.gif.
Sorry for taking so much space. Please anyone who wants to contribute or correct me is more than welcome to enhance our learning experience.
Best wishes and much pips to all.
Nadia.
Attached File(s)
File Type: pdf Fari 4Hour MACD Losses.pdf   101 KB | 1,038 downloads
TRADE WHAT YOU SEE... FOCUS ON SUCCESS
  • #5,862
  • Jul 26, 2007 9:47am Jul 26, 2007 9:47am
I'm loving this thread! Still a newbie here so my comment will be elementary right now. After reading Nadia's comments and listening to Phils review, in general perspective, one of the most important things to consider is...the trend is your friend...is it? Therefore, should we avoid entering at counter trends? As I see it, it is very risky, and only rewards very few pips.
  • #5,863
  • Jul 26, 2007 9:47am Jul 26, 2007 9:47am
Quoting Palmer
Hey folks...Work is taking my out on the Big Blue for about two weeks and won't be back here until the third week of August. No sharks this time Donna, just some grouper and snapper stuff...

Anyway, I'm thinking if anyone else is thinking, "What happened to the next bounce to the upside at the bottom of the 1hr channel on the EUR$??? It fell like a brick right through it!!!" A few posts back I noted that I had a wacky feeling about things for some reason. As the price action on the 1hr was heading to the support line...again...I didn't do anything. It may have been that long candle that closed below the support line (channel bottom) that kept me away. But, the MACD turned up (to green) just the same but priced stalled. Then I noticed, this is after the fact, that the MACD tops were getting progssively smaller as price on the 1hr was still making new highs. So, there was some bearish divergence coming into play as well. The same thing was happening on the 4hr as well. Also, on the 4hr channel price had made its way through support of the channel for the first time = weakness??? But, back to the bearish divergence on both timeframes...When you have the same signal, setup, formation, or deja vue (spelleeng?) indicator on multiple timeframes it's usually a very strong signal to follow the rules of that signal...In this case to sell. BUT...The 4hr was above the 89 and we were still bullish. That would have been a tough call per the rules. The MACD was showing 'another' very weak Rt because it was below the 0.15 line. This was the 5th or so weak Rt in a row but the 8/21 were too close for any real profit targets also. Hmmmm, the take home message.....1) Mulitple timeframe signals. 2) MACD divergence. 3) Price breaking through support (or resistance) for the first time in a very lonnng time.....It's always easy to see this after the fact. But, it's easier to remember it the next time this occurs...

July has been a good month. The USDJPY was good to me, lot's of entries and pips in the bank. I've got no open positions and I have lots to do before the ship leaves the dock so no trading for the rest of the week per Phillip's 4hr method. I think there's an eco news release on Friday and I may watch that but that'll be it until mid August. I may poke my nose in here a few times before I leave. Soooo, don't force your trades and as Phillip has stated, "Let the market come to you."

Trade Well....
Take care Palmer! Will miss ur eur$ & yen analysis. ( i focus mainly on gbp & yen only..and yes YEN has been good for us this month )

See u in Aug
  • #5,864
  • Jul 26, 2007 9:55am Jul 26, 2007 9:55am
Hi Palmer!

Have fun on the boat! Beano and the forum will miss you!

Great post on the multi-timeframe divergence! That's a powerful signal!!! In your subconcious (sp?) mind you knew something was wrong -- and you sat out of the long trade! Excellent!! Thanks for sharing the info w/us. You Rule!! Hehe!!

Seriously -- your excellent observations will be missed. Have fun w/the "safe" fishes in the sea!!
  • #5,865
  • Jul 26, 2007 9:57am Jul 26, 2007 9:57am
Panther!

Nice charts and thanks for sharing your analysis!! Looks like your long is going well . I took a Swissie short (sorta a conf. for the e/u long) and it has played nicely as well!!

Thanks again for your great post!!!

Happy trading,
Pips
  • #5,866
  • Jul 26, 2007 10:00am Jul 26, 2007 10:00am
Bil,

Nice analysis of the trades...did you notice all the countertrend trades? (obviously you did)....Have you guys noticed how easy it is for our minds to see the contra trades? Is it because we are afraid to "chase" a trend? I've been thinking about this for a long time...looking for a reason b/c I seem to always want to sell. Do you guys think we see the "pattern" for a top or bottom because we are impatient? Just wondering...

Thanks,
Pips
  • #5,867
  • Jul 26, 2007 10:04am Jul 26, 2007 10:04am
Quoting BIL2205
Hello. I hope u all are doing well. I was looking at Fari's trades, and i am not critisizing but analysing. I've been following Phillip's system for a little over 2 months and still consider myself a NEWBIE, because still learning. ( I have added the pdf of chart at bottom for quick viewing)
Trade#1
This was a counter trend trade. notice that it was taken right on 8ma. counter trades are high risk an even if you want to take it according to your analysis, 8Ma should be your target , not the point to enter.

Trade#2.
again counter trade. Notice the candles before the trade candle. After such a strong bullish move up counter trade is suicide. also the signal candle closed above the previous candle so i dont see any indication for a down move.

Trade#3.
Another counter trade. Price closed right on 21 MA and a trend line, which would be considered support here.From here i would expect a Tc , which came right on the next candle/bar.

Trade#4.
This one is still counter trade but some what decent with 8MA as target since MACD above 45. But look at risk reward. Stop loss would be the trend line above or the high of previous candle. and target 8Ma. i dont know how many pips exactly but visually does not look ok. If your target is 21 MA since macd above 45 then it looks ok.

Trade#5.
counter trend trade. Macd is on the higher side, but price has already closed just above 8MA with a long tail . candle emotion is very important to read as well. price bounced right back in next candle. The short signal after that was more valid if you want to counter trade because small candle closed above 8 ma also trend line above acting as resistance so chances for some consolidation there.

Trade #6.
No comment .,the mistake is soooo evident.
Trade# 7.
counter trade. looks ok now since break out afterwards. but by just looking at it u see resistance at 8 MA. The channel is getting narrower between the trend lines so maybe position for a breakout.

Trade# 8.(i dont trade this pair so will analyse just what i see)
price broke through 89 and 200 and went back to 21 . now chances are that price will bounce again from here down. but look at macd it did not confirm to go short. beacuse price can go thru 21 MA a little bit as well. and that is exactly what happened. So wait for a MACD confirmation because it is a good set up especially since 200 was also crossed and chances for price to test it again are also there.and 200SMA acts as a strong resistance or support as well.

Trade #9.( dont trade this either but here goes)
counter trade. candle not bullish.
Trade# 10.
looks ok because trend continuation.( or maybe i am running out of analysis http://www.forexfactory.com/images/icons/icon12.gif)
Trade#11.
I have no idea why that was taken. if it was thought of as Tc ,it was a little too late. the candle that was taken as a signal is bullish closing close towards 8 ma , not away from it.

Maybe i should have made a PDF of this analysis. but too late for that.http://www.forexfactory.com/images/icons/icon10.gif.
Sorry for taking so much space. Please anyone who wants to contribute or correct me is more than welcome to enhance our learning experience.
Best wishes and much pips to all.
Nadia.
I went thru a few pages of Faris's pdf, I wont comment on the trades as BIL2205 have commented on it. However, i get a feeling that the trades seems to be based purely on MACD signals. Philps have emphasis numerous times that we need to understand the market rythem i.e. price action.

I am using Philips system for close to 2months after demo testing it for close to 3mnths, i using it on my live account. I'm still a newbie in trading.

For the newbies.. here's my own experiences. 4hr MACD do work BUT ONLY IF

You have understand PRICE ACTIONs or the market motion. MACD is an indicator. All indicators lagged..i use MACD as confirmation on my analysis. Sometimes i even go against the MACD as i put price action abv MACD. Doing tt enables me to get in earliar at a better price.

Price action can be candlesticks reading (which i use), moving averages related to price (which philp has taught us..thank u again!), trendlines, channels, Support and resistants, fibonacci? (i dun use it but there are pple tt just trade based on tt). Once u learn all these, come back again, GO THRU the thread again. I promised you, you be a much much better trader.

An example is today. on my way back from work i re-read philips pdfs again. I discovered i have missed out (or forgotten? : ) on certain points he wrote. So newbies, let's work on building a strong foundations 1st before we dream abt building skyscapers.

I hope this will help some of u out there.

cheers
  • #5,868
  • Jul 26, 2007 10:04am Jul 26, 2007 10:04am
Quoting ira
I expected the EURO breakout due to the strong divergency and had a wonderful trading plan both on short and long, but I didn't executed it . The reasons are: move was very strong, I waited for a retrace, but it didn't happen. But the main cause was my fear! I had already one loss waiting for breakout, so wanted some more and more conformation. When I had it, it was too late . Next trader's mistake - don't let the past failures interfere in your present work!
Move on... Euro has gone through 89MA and stopped at 1.3700 price level giving a RB on MACD. The rule tells us that after going through the 89 it might go and test 21 again. But on it's way there is 89, pivot and 23.6 Fib number, besides 21 can travel to this level as well.
Hi Ira,

What great advice!! It is very difficult to get over the "sting" of losing pips...but, if we are scared, we miss the good trades only to re-enter on a poor signal. Thank you so much for writing this post. I bolded (word?) the phrases that really impacted me! Thank you again!! (& welcome back!!)

Pips
  • #5,869
  • Jul 26, 2007 10:12am Jul 26, 2007 10:12am
Hi,

I am fari from the skype chat, and I am also a novice with this system.
Hopefully we can learn from our mistakes.

I want to thank Phil and Bil for commenting my trades.

My conclusion after hearing/reading the comments is to avoid countertrades in strong trending phases.

I did well in a more or less trendless price action from mid of April till June
where my countertrend trades worked more often.

But in a trend market they will kill you.
Phil is right, I did the trades without proper planing, but if ´ve had analysed the trades before I would have maybe not made so many mistakes.

How ever here are comments/thoughts for the trades:

#1 => OK
it was a nice round top over 7 bars, after a strong upmove, a countertrade
to the EMA21 was possible.
I would think it is a system failure trade, a nice round top should be taken even if the other parameters are not 100% in syn. The goal of the trade was 50 pips (EMA21), SL: 40 pip the top before.

The target should be between ema 8 and ema 21.

#2 => NOT OK
premature trade, that was wrong entered too early.

#3 => NOT OK
no clear trade

#4 => OK
from my point of view ok:
there is a ressistence line from 6.12.2007 @16 to 20.6.2007 to 3.7.2007 to 11.7 after that the return from the extreme occured.
SL: 40 pips, TP: 45 pips => OK

#5 => OK
very similar like #4
could be a BE trade

#6 => NOT OK

#7 => OK
Once again the ressistance line was hit, then a round bottom occured
would result in +50 pips.

#8 => OK
a TC => System failure

#9 => OK
after a pinbar a round bottom occured => long

#10 => Ok
Price under 80, in a nice rhythm
TC from EMA21 => System failure

#11 => OK
Price went from down to MA80 then down in a nice rhythm to 21 and back and so on.
When the MACD went over zero and then back to negative a sell signal was given. => System failure.
There were a few trades like that in the analysis of Phil.


Thank you very much guys, I appreciate all you work and help.

br
panther_trader
  • #5,870
  • Jul 26, 2007 10:27am Jul 26, 2007 10:27am
Quoting pips4uandme
Bil,

Nice analysis of the trades...did you notice all the countertrend trades? (obviously you did)....Have you guys noticed how easy it is for our minds to see the contra trades? Is it because we are afraid to "chase" a trend? I've been thinking about this for a long time...looking for a reason b/c I seem to always want to sell. Do you guys think we see the "pattern" for a top or bottom because we are impatient? Just wondering...

Thanks,
Pips
Funny, I was thinking about it only yesterday. First I came to the conclusion that I am "a bear" , I also more like to sell. But it's only in terms of EURO. My answer to this question is that we are all afraid of future. It's much better to look back, there are trend lines, we see how price behaved, we see boundaries, we see history. It's much easier to take a decision. In front there is nothing, especially now .
  • #5,871
  • Jul 26, 2007 10:29am Jul 26, 2007 10:29am
Quoting pips4uandme
Bil,

Nice analysis of the trades...did you notice all the countertrend trades? (obviously you did)....Have you guys noticed how easy it is for our minds to see the contra trades? Is it because we are afraid to "chase" a trend? I've been thinking about this for a long time...looking for a reason b/c I seem to always want to sell. Do you guys think we see the "pattern" for a top or bottom because we are impatient? Just wondering...

Thanks,
Pips
Pips,

If I may, I'd like to butt in for a moment with my thoughts (aren't I nice, asking to butt in?)

I come from a trading backround where I was taught to trade counter trend. I would look for areas of price that were old support or resistance areas, and get them to match up with pivots or fibs, then enter at those levels in the opposite direction of price movement, looking for a bounce. The idea being you could grab a few pips just off the bounce, and from time to time you would actually catch a trend reversal and bank big pips. This actually works pretty well, but you wait around a lot for trades sometimes, and I got tired of watching the pound move 150 pips to get to my bounce which netted me 20 whole pips.

So that's why I am here. I wanted to learn a system that would allow me to trade with the trend. I have a good amount of knowledge about forex and how it works, but I realize I have very little understanding of market rhythm, so I'm working on it. (remember my sensitivity training? It's going well)

In my roundabout way I'm trying to say I agree with you that there is something that causes me to 'see' the counter trade easier, and it goes beyond my previous training. So do you think this response can be dealt with or unlearned?

By the way, your posts are among the most helpful to me, so thanks to you, and to all who graciously spend their precious time to help others. I'm getting in the rhythm. One, two, cha cha cha......


With grateful thanks,
Richard
  • #5,872
  • Jul 26, 2007 10:40am Jul 26, 2007 10:40am
Info
Attached File(s)
File Type: zip Daily Wrapup 26July2007.zip   702 KB | 1,234 downloads
  • #5,873
  • Jul 26, 2007 10:41am Jul 26, 2007 10:41am
Where can I download your alert indicator? I have the colored MACD, but could not get the alert indicator to work. Thank You
  • #5,874
  • Jul 26, 2007 10:49am Jul 26, 2007 10:49am
[quote=panther_trader;1509790]Hi,

I am fari from the skype chat, and I am also a novice with this system.
Hopefully we can learn from our mistakes.

Great work Fari! It's good that you learn from your mistakes and let us learn. I trade only EUR at the moment, I looked back in my trading journal and here what I saw: I took TC on the 2/07 (Phillip's first signal), but it was only +17, as I stupidly closed it (was influenced by someone's opinion, I posted it earlier on the thread). I didn't take RT (your deal #1) didn't want to take counter trend trade. As for the TC signal from 5/07, I opened the long deal earlier (without a signal), but I liked set-up with small candles and price forming RB with the trend from 8MA. I moved SL closer and it was hit with the next news candle (should have closed it before the news) -18. So I was -1 for that week .
  • #5,875
  • Jul 26, 2007 10:58am Jul 26, 2007 10:58am
Quoting pips4uandme
Bil,

Nice analysis of the trades...did you notice all the countertrend trades? (obviously you did)....Have you guys noticed how easy it is for our minds to see the contra trades? Is it because we are afraid to "chase" a trend? I've been thinking about this for a long time...looking for a reason b/c I seem to always want to sell. Do you guys think we see the "pattern" for a top or bottom because we are impatient? Just wondering...

Thanks,
Pips
Hey Pips,
I couldn't agree more in that I always see the counter trend trades and it's hard to go with the trend, but I've just got up to about page 80 on that e-book you posted a while back (one about the stock trader in early 1900s).

From about page 70-80 of the e-book, I think the explanation of how/why you need to go with the trend is fascinating.

It all appears so clear and easy to understand when written like it is, but the human mind always wants to go against it!

I forget the post number of the e-book, but if anyone wants it again I've attached it here just in case.
Pips , Phil - hope you don't mind.

Cheers
Colin.
Attached File(s)
File Type: zip trading ebook.zip   817 KB | 1,640 downloads
Enter Signature
  • #5,876
  • Jul 26, 2007 11:31am Jul 26, 2007 11:31am
The more I look at this "System" the more it is just plan old trading and learning how support and resistance works. I think MACD is just a part of it. This stuff is nothing new as I have traded MACD in the past counter trend on the SPX with a 3min chart. I will say Phillip's trend lines do help a lot and learning that is the key. Again "All of it works and none of it works".
Keep taking CT trades, I need more money
  • #5,877
  • Jul 26, 2007 11:32am Jul 26, 2007 11:32am
Quoting Ryanmcd
Looks like a long @ .720 on the euro. Macd looks good stop loss @ .690 nice little support there. Just posting my thoughts and taking SS of the chart to see what I did right / wrong. This is paper only

Out +45
Keep taking CT trades, I need more money
  • #5,878
  • Jul 26, 2007 11:36am Jul 26, 2007 11:36am
Hello FAri,
i hope you did not take my analysis of your trades in a negative light. It was not meant to critisize in any way like i said. Trust me i have made my share of mistakes in the beginning. still learning. All of us have different perspective of the market. I still read Phillip's pdf and listen to mp3 and discover somethinig new. Learning market motion, candle emotion, price action, market emotion is a process. slowly things start to make sense and it starts coming together. You are doing the right thing by discussing your trades so we can all learn from it. There is a very positive energy in this forum. I dont know where i am going with this speech, like ellipse said,
Lets all the newbies form a solid foundation!!!!.
best wishes ,
Nadia
TRADE WHAT YOU SEE... FOCUS ON SUCCESS
  • #5,879
  • Jul 26, 2007 11:52am Jul 26, 2007 11:52am
760-765 is the brick wall, 2 MA's and a tall downbar to fill
Keep taking CT trades, I need more money
  • #5,880
  • Jul 26, 2007 11:54am Jul 26, 2007 11:54am
Quoting cologg
Hey Pips,
I couldn't agree more in that I always see the counter trend trades and it's hard to go with the trend, but I've just got up to about page 80 on that e-book you posted a while back (one about the stock trader in early 1900s).

From about page 70-80 of the e-book, I think the explanation of how/why you need to go with the trend is fascinating.

It all appears so clear and easy to understand when written like it is, but the human mind always wants to go against it!

I forget the post number of the e-book, but if anyone wants it again I've attached it here just in case.
Pips , Phil - hope you don't mind.

Cheers
Colin.

Good book read it several years ago. Also Check out Pit Bull, thats a good read too.
Keep taking CT trades, I need more money
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