4 Hour Strategy (MACD)

Hi, been reading this thread quietly but its time for a question.

The chart posted above in BIL's post (euro4H) lined up with how mine was setup (first relief). There was a trade 7 periods back on the close of the 5am candle to go short, reasons 1) Broke through the 200 and retraced to test it, 2)the macd showed a continuing down trend by reversing its direction 3) wanted to try the 365 with nothing to stop it.

Is there any reason i shouldn't have taken this trade?

This is the most high prob. trade .. 1h supp. 4 h .. best wishes

Ammar

Just a few thoughts here....

I overlayed these two charts to show both of them at the same time, looks kinda sorry but oh well. The $Yen 1 hr chart has started to channel a little while the 4hr MACD flattens. This may set up an opportunity to trade the highs a lows of the channel while the 4hr decides what to do. The Rb that formed on the EURO$ didn't work out to well but the loss should have been minimal, only about 15 pips or so. I did not take this signal for the sole fact that the PPI and Trade Balance numbers both come out today in about 25 mins. Price action can be wacky the evening before major news events. Waiting or that news to wash out before doing anything...

Hi, if this is the trade you are talking about , it was a good setup.Price had pulled back above the 200 but closed well below it. and macd supporting a trend continuation signal down, the odds are in your favor with 365 as target. I hope this answers your question. Anyone else out there is welcome to add to this analysis, Thankyou.
Nadia.

Hi Palmer , welcome back, we missed your posts. But as u can see we have a lot of newcomers in the thread which is great. and did you check out OLD DOG's posts. He is doing so well especially helping with the written files . I finally did a trade on your favourite pair usd/yen. same as u did. worked out fine . So maybe i will start looking into this pair. Get ready for some questions from your truly hehehe. Anywyas good luck. i had not posted all last week and now cant seem to stop: . may the pips be with you.
Nadia.

[quote=pkchilly;1536715]Can anyone tell me why you would not take the rb on EUR/USD? It curved very nicely up till the 2-6am candle signalling a rb back to at least the 21, but then tc'd. How can I filter out such trade. It seems the rb would be a high probability trade with a tl just under, major support at 1.3600. The only thing against the trade was the close under the 365--so I guess this has more weight than the others!? Any help would be greatly appreciated as I continue to lose trades that seem to be high probability rb's and rt's with 3-5 candle curves--then turn into tc's and hit my sl's I'm getting to the point where I won't even trade rb's and rt's.

Hello there pkchilly!!!

i will try to answer your question to my full knowledge. Round tops and bottoms are counter trend trades. I have done a lot of them in the beggining with most of them being in loss. i was at a point where i did not want to trade anymore with so many losses. Then i analyzed my trades and figured out that everytime i missed a TC trade i would do the round top or bottom because it was easier to have a profit target in sight. 8ma or 21 ma. so i stopped doing them and just focused on the Trend continuation ones. Now this does not mean that RT or RB are wrong trades however since it is counter trend you have to keep in mind the speed of the trend against which you are willing to go. Also which Moving averages are close by ,which the price can target before going to the 8 or 21. Phillip has stressed on 3 major ones 89, 200 and 365 as major support and resistance.So in your scenario if 200 which was acting as support has now become resisitance . then price will look for the next support available, which is 365. It did not make it there in one move but did eventually hit it. so we have to be very carefull when all the major MA's are in close vicinity. I have been following this thread for few months now and still consider myself a newbie because just when i think i have understood it i realize there is more to learn, which is encouraging instead of discouraging. I know my post in getting long. but i hope i have helped answer you in some way. I dont trade swissy, I know it is Donna's baby( pipsforuandme) so hopefully she can help u on that. but i will look into it to see if i an help u with that.I Will eventually take round tops and bottoms. but for now i want to master the trend continuation until i have this market motion through my head.or like phillip says, IN YOUR HEART!!!!
Good luck.
Nadia.
P.S . please feel free to ask questions if something is bothering you.it will help you a lot.

[quote=pkchilly;1536715]Can anyone tell me why you would not take the rb on EUR/USD? It curved very nicely up till the 2-6am candle signalling a rb back to at least the 21, but then tc'd. How can I filter out such trade. It seems the rb would be a high probability trade with a tl just under, major support at 1.3600. The only thing against the trade was the close under the 365--so I guess this has more weight than the others!? Any help would be greatly appreciated as I continue to lose trades that seem to be high probability rb's and rt's with 3-5 candle curves--then turn into tc's and hit my sl's I'm getting to the point where I won't even trade rb's and rt's.

Hello pkchilly -- I or someone else will get back to you later with more comments. For now, I'll just say that, with RB's and RT's, what you consider to be the dominant trend is important. If there are any underlying conditions that might cause you to doubt the outcome of the trade, it's better not to take them as counter trend trades. You mentioned the 365, which is an important support/resistance zone, and one of the things you have to consider is that such support, when broken, is likely to become resistance. Therefore, you have to be patient before taking such trades because price may not break back through support that has become resistance. Welcome to the thread!

Nadia:

Glad you made some on that pair. I don't want to say that this pair is more 'reliable' than other pairs, but it just seems like it's easier to 'read'.....

gotta run out for a while....

I've just downloaded the MACD colored V 103 ... where I can found a complete explanation about this indicator? Thank you in advance

Hi Ira i was just reading your post again and a thought went through my head. Its amazing how we are growing in this system together,. First we were afraid to be wrong and now being right scares us. !!!. i think i will take the being right over wrong any day , just take the scary part out of it.Good luck.

Thank you, Robert, I think I'll do the same, practice on demo untill I gain my confidence back.

Here is a look at euro daily chart, price moving in a channel. If price keeps its rythem on the 4 hour like a pull back followed by a trend continuation we could see another 100 pips down move to the bottom of the channel trendline.Keep an eye on the 89 on the daily chart .currently price finding support on it. observe in past how price acts around it. Also keep in mind any major news this week.Lets see how it goes. ( I hope this is my last post of the day. i guess i just woke up from my hibernation).

Nadia, such great posts! I was reading your answer to pkchilly and wanted to tell you how amazingly you grew, but you were the first. May I add only one sentence to your wonderful post. While backtesting, I have noticed what I call "the rule of first turn", after the price had gone through 89 than retraced to 21 and continued it's way down in a trend, it usually very risky to take the first RT/RB, as price usually "rests" and comes only to the 8MA and then continious trend, so it's much better to wait for the TC. Besides one should have already been in a trade with SL above 21 trying to ride a trend.
Oh, that's two sentences .

aaaaaaaaaarrrrrrrrrrrrrrgh!!!!

Missed it because I had to step out....This was a quick 30 pips maybe more....

Side note:

Even though this isn't 100% per the 4hr Method, there are times when you look within the method that other entries can be found. But, those entries, like the one mentioned here, are still based on the MACD color change (Tc, Rb, or Rt)....

Ha! Thanks alex. I'm a better typist than a trader. Speed of light? I wish! But I tried speed of light trading yesterday that I wanted to share and thought was fun and instructive at least to me.

It truly is great to have a place where we can bounce ideas--I'm learning this system (I'm on the 20th page and had just done Philip's exercise which relied heavily on rb's and rt's so I had those in my mind) Thanks to all of you for clarifying about the 365 s/r. I guess another thing that is really hard for me to get away from is horizontal lines--I had one set at the last 4 hour low and thought it would be a good support--I need to find out what supports trump others! I wouldn't have taken this had I realized that the 365 trumps as resistance after being support because the rr was too small. I think I will take your advice and just work on my tc's on just the Euro unless I'm up against a day tl and have signs of a rb/rt. I have only just been listening to Philip's analysis of 4H 1H on my mp3 while I work so have not yet begun to use this strategy--I will learn it as quickly as I can as I think we will be in for more tc's on the Euro down to that major day tl. 100 pips, a lot to learn on. And also, thank you for that "don't take the 1st rb/rt" I like that rule, looking back it certainly looks like a good way to filter. Again, thanks for all the help--I will continue to learn from all of you. pkchilly

Info

First of all, thanks for mentioning me, Nadia; and, first of all again, I think that you and Ira have simply reached a natural plateau, something that seems to happen in all areas of life. You're simply getting ready to move to a new level. It does sound kind of scary, doesn't it?

Now, for my experiment:
I haven't been keeping up with USDCAD recently, so I decided to do a little test on the demo yesterday to see how quickly I could do an overview and how much of Phillip's method I might have at my fingertips, not good for actual trading purposes but good for testing myself to see if I've managed to modify my instincts and how much of Phillip's approach to the market I've internalized.
There was no time to go to the monthly, weekly, and daily charts, so I did most of my calculations on the four hour one. After all, the purpose was to test how much thought would be available to me at a moment of quick decision, rather important since I have tended to be led by emotions in my trading of the past.
14Aug2007, 00:00 GMT: Entered on a zero cross. at 1.0562. 365 ema =1.0669. Most recent high = 1.0641. 200 sma = 1.0528. 21 ema =1.0540. Daily trend line from 1Aug2007 = 1.0592. Four hour trend line from 9Aug high to 10Aug high =1.0548. Most recent turn around low = 1.0483, and the high of that same bar = 1.0540. At the time of the analysis, price was at 1.0555/60.
My strategy was long at 1.0562. Stop at 1.0518 = -56 pips. (Below the 200 sma at 1.0528). Profit level was 1.0605 (below most recent high of 1.0616) = 43 pips (Bad R:R). (It's interesting that, in trying to hurry, the most elementary part of the trade, R:R, would be the one ignored so blatantly).
Today, before the 12:30 GMT, news, I reset my profit target to 1.0585, below the daily trend line at 1.0592. Since I had no second or third profit level (I had entered the three mini lots together and couldn’t separate them), I couldn’t afford the risk of a news born turn around, and it was all or nothing. After the news, the USD started strengthening, and I tried to move my profit zone up. There wasn’t time, and my target was taken for +23 pips. USDCAD has, so far made a high of 1.0655, a possible 90 pip gain. I just thought it was interesting to see how much of Phillip’s teaching was taking hold and how many of the old habits were still present.

Thanks Philip for the wrapup--solidified in my mind my need to look more at market movement--truly rb's and rt's are countertrend and much scarier to me now that I have more info in hand. I'm going to work on just tc's with the Euro/D and try to master them with market movement and the 4h/1h method then I will move to harder trades. Looking back at the charts, I'm seeing both trades, Swissie and Euro/D had been trending strongly in the direction they took counter my trades--wish I had seen that before. Sometimes I get blinded by just wanting to make a trade pk

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