4 Hour Strategy (MACD)

I just noticed this on the 1hr $Yen...Looks like a head and shoulders formation working. The 4hr has a Rt 'in play' as well...

Hi Palmer....

Funny, noticed the same thing when checking the charts 30 minutes ago...just looked at E/J and G/J and they too have the same patern...except it looks like 3 inside tops/nesting dolls have formed....will be interestig to see if price bounces at the base (which is about the 21) or if we resume the down moves for yen based pairs. Not to fond of trading them on Friday's b/c I seem to get stuck holding the positions over the weekend (the last month has been odd...the pairs move in one direction -- then turn rapidly (usually down then quick turn upwards for market close -- tracking tick for tick w/the Dow) -- then they drop a bit after I'm locked out of Friday's Market (they seem to drop around 5PM EST -- my broker locks me out at 4). Then the earlier Friday trend continues on Sunday open. Very bizare and scary...I worry about holding the yen pairs because they were so volatile during the last month and I am unsure how much slippage my broker would apply w/a large gap against my position. Fortunately, stops were set at good levels and the positions were OK. Had to hold for 2 consecutive weekends...now really think hard about taking on the yen on Friday.

Do you take trades on the pair on Friday and hold if necessary?

Thanks,

Pips

PS...Your probably at the beach....I'm sooooooooooo jealous!!! Listening to the waves lap down the street while you trade -- talk about zen!

there is a question
as right now, in 4 hr chat aud/usd macd showing it is going down
but in day chat it showing it is going up

what the situation like this what should i do?

or we only look at the 4 hr chart?

tks

To pips
I almost never trade on Fridays .
I just trade when there are important news only (but never NFP), Friday market is too slow.
when I was a newbie I took some signals at 5 am EST time and 1 hour before market close the price stayed at same point.
Hold positions... uuum I think is very risky.

There are small candles (doji) only in 4H chart.I would wait for a better pattern .
Be patient.

Hi lazyegg,

Generally speaking, use the important Trendline Levels from the daily (support and resistance levels) but as far as MACD signal, just trade from the 4 hour chart. It gets more difficult to pull the trigger on our trades if we are looking for confirmation of trade on multiple time frames. (But it is nice when multi-timeframes are in harmony, eh? ). Remember, the 4 hour will show a change in direction sooner than the daily will. Also, we are planning our trades on the 4 hour chart, so the signal should come from that chart. If you need confirmation b/c price is near a significant level, or you are anticipating a TC forming, switch to an hour chart to see how price is behaving. If you are new to the system, make sure you have done your homework first by testing historical trades first on the 4 hour timeframe only.

Currently price is not able to close above a resistant line on my 4 hour chart and their is divergence on the MACD...both good signs for a short. The next step would be to think about where your stop and profit levels are. Then consider r:r. After that, think about the market motion....what do you see and what do you anticipate to happen.

Hope this was a little helpful,
Pips

Hi Chewie!

Yeah, overall I'm with you on your Friday trading. Last year the market use to be quite a nice scalping opportunity on Friday's...this year it has been much more difficult. Tomorrow does have really important news...Durable Orders and Housing. Overall, I don't like holding over the weekend either. That's why I'm not playing any of the yen pairs today/tonight...learned my lesson the hard way Greed is a terrible thing!

Ok my euro long worked out fine. Profit Target was 89SMA . It got hit this morning. It was a risky entry since i entered pretty late. But i had a feeling that since 89 was not hit in the first move it should be the next target. I got lucky that it happened today so no trades open over the weekend. Well i think i will be out of the market until next week. You all have a great weekend.
Nadia.

tks pip . that help

Hello,
right now (6:40 am EST) I see a TC in eur 4HR .MACD is ok but we have MACD divergence in 1HR time frame.
So I am confused should I consider that or not?
Thank you
mike

Hey pips:

I'll hold a position over the weekend if it is in the money really well, like 50 or something. If the same trade produced several other nice moves during the entry and those profit targets have been hit on the other lot entries and if it happens to be a Friday I usually keep it open...it's free money anyway aye???

Nadia:

Yeah, we hit the 89, took a little while to get there but it worked out either way. The Rt that formed on the 4hr had a little R:R that was a few pips to the risk side, looked like a flat top Rt...hmmmmm, either way I was already long.

Mike:

Careful on an entry right now, the durable goods orders is out at 8:30 EST USA so be cautious of an entry this close to a news release...

Wow. Your analysis was spot on with what happened the next 18 hours.
I went short on the E/U and G/U.

I have the E/U chart before i made an entry, pending the MACD signal. As you can see the price did pierce above 89EMA but failed to close above it. It also did pierce the 365EMA.
" You coud have taken the bounce off 365 down to 8ma as that falls before the 29.But keeping in mind yeaterdays resistance can act as support for today."

29 do you mean the 89? But what i interpret was looking at the chart, the trend was looking on the downside, piercing strong resistance of 89 and 365EMAs. Therefore, with MACD signal coming on as a V turn or round top, i just like to know where did my analysis go wrong which made me took a short trade.
"For my euro trade i think price might bounce in a range for a few hours and 8 MA will catch up to it and then a nice bounce off it to 89 eventually. And then price can resume its rythem with a pullback to 21 and back up , up and away!!!."

This actually happened, 8 EMA did catch up to price just about a candle close ago. Wow. I love to have to thought process and analysis here.
You were also right with the GBP short trade. I put my TP too far (21 EMA) instead of your analysis of the 8EMA. (which in fact should have hit this earlier today). I was at work so couldnt manually close the trade. Now instead of having good profit , i'm stuck in negative territory.

Anyways, Nadia, I'm reaaally a newbie here and would like you to share your wisdom and analysis on those 2 trades. What you did last night ( i was asleep when you replied) was like having a crystal ball.

"There is a whole lesson by phillip about it how you start from a larger time frame to see the major trend and then narrow down to smaller time frames. I think this is where reading the market comes in. I think to put it in easy words is that there is a short term trend within a larger trend, and the short term trend can result in the larger trend change( talking about the 4 hour time frame here)
( and i thought i was putting it in easy words)."

Oh yeah! The daily and weekly (daily is not so obvious) does show a clear uptrend. Read something about making entries in the short TF chart to 'catch' up with the longer time frame chart. I'm really seeing what i need to improve on...wow...this is exciting. Does this comes with experience, screen time, backtesting and making trades as you go?

Thanks a lot again Nadia, I feel i truly learnt a lot here...and more to come too!

Cheers,
Mike

It took my stoploss with it. I shorted it. In regards to the earlier post i replied, what was your thought process to take this long?
Was it because of the underlying longer TF (daily and weekly on uptrend) , 4hr downtrend is just smaller trend of the overall trend.

Cheers,
Mike

Hello mike 1349, sorry i am out of skype today. my laptop is freezing up on me and my desktop is ancient so no skype on this one.( i sent you a PM about it). Anyways for euro. it did hit 89 and now next target is 200SMA, It might get hit today if u look just at the macd long TC signal. However if you keep market motion in mind price just crossed 89 and it might come back to 89/8/21 either one of these before it goes back up to 200. so your stop loss should be under all these MAs.If your Money management can handle it then its ok ,otherwise i would not take this trade. Now we might see some ping pong action between 200 and 89 starting next week. until there is a big market mover(NEWS) to break 200 sma in one go. I would be careful trading today since it is friday. However looking into next week i would look for a retrace to one of the above mentioned MAs and then take a Trend continuation from there.And once price hit 200 SMA i would look for a retrace trade down to whatever MA is closest at that point. I hope this helped.

[quote=BIL2205;1557399]Hello mike 1349, sorry i am out of skype today. my laptop is freezing up on me and my desktop is ancient so no skype on this quote]

Thanks Nadia,
Do you have any idea about my question earlier about MACD divergence in lower TF or somebody else may be?
We miss you in skype
Thank you Palmer too for the heads up.
I found this article very interesting.I hope you enjoy it too.
http://www.dailyfx.com/story/tophead...887841525.html
Regards
Mike

Hi, sorry about the confusion . I meant 21 EMa and not 29. Typo there.i just fixed it. Also looking at your chart you have 89EMA , it should be 89 SMA(simple) . I think that is why your 89 is so much closer to 365 and gave you the visual indication that it has already been tested. Please check your settings and see if it makes a difference on the distance between the Moving averages and then your perception of the trade you took might change.

About having a crystal ball. We all wish we had one. But remember i took the red pill.( sorry had to put this in, Matrix/ part 1 happens to be one of my all time favourite movies after God Father ofcourse ).
Anyways point being bye bye wonder land , Hello Reality. It has taken me a lot of hardwork, talking to the charts. posting in this thread, writing jibberish in notebooks only i can read: , cutting down to only 2 pairs for now. and most important of all NOT GIVING UP. Making/ accepting and learning from your mistakes is equally important. I feel blessed to be in the company of such generous people. I have days when i am out of focus and cant read the market properly. that is when i take a wrong trade or just stay out. So you have to make your own set of rules as to how u will trade. Iknow this post is getting long but one more thing i would like to add is that i have learned is to focus on one thing at a time. Your state of mind is extremly important. Switcing between time frames is recommended once you understand the concept of this system. Now that i feel like i am getting the hang of market motion , i started to look into 1 hour early entry. Had a few losses before understanding it. Now i feel somewhat confortable. so next step is to look at bigger time frames to see if the trade will survive before hitting the panic button. The daily helps in that.For the last euro long trade i took i saw on the daily chart that price had crossed 89 and still had not touched 21 but was moving in that direction, and 21 on daily chart was really close to 89 on 4 hour so that gave me a safe feeling. Also time of the day is important. Price does not really move much after 1600 gmt.
Now that i am concentrating on my entry i would like to focus more on my exits and have multiple lots. so make a plan as to how you want to move up. It is like going to school. 1st grade second grade etc. If you have several successful trades on what you were focusing to learn you are ready to move on to the next grade. It is about your own comfort level and how much time you can dedicate.This all might sound childish but trust me, if you want to treat this as a profession it takes time and patience.
It is not possible to take every trade. Like my analysis for current euro TC . Now i anticipate it as a valid signal and the trade can be taken up to 200 and like i said it just might get there today but what are you willing to risk to take on that trade.If you skip an oppurtunity because your money management does not allow it or for what ever reason .It is not healthy to look back on a trade and say. Oh i wish i had taken that. Trust me i have burned valuable time just mopping over trades.(Still do but less time ) Now i try to focus on what could be anticipated next instead of what could have been. Ok before forex factory blocks me out for writing the longest post ever.I think this helped you in some way. I think i for got your original question. Good luck.
Nadia.

Hi guys,

I'm still making my papertrading and just want to show you the very good software for testing Forex strategies. It called Forex Tester. You can find it here: http://www.forextester.com/
I'm using it right now and I like it. Very helpful for newbies like me to develop trading skills.

If you find it useful let me know. I've made Color MACD and set of MAs indicators for this program and ready to share it if you need.

Max

Hi Nadia,

It is amazing how quickly you have grown as a trader! Keep up the great work!! Looks like you have found Alcastro's crystal ball

Have a nice weekend!

hmmmm.....isn't it the Simple 89 EMA?

re: hourly divergence....I wouldn't. use it to make my trading decision..only use the 1 hour to compliment the 4 hour chart. Remember too -- divergence can last a while if a pair is trending...look at E/J before the major fall -- think the hourly was divergent for a month LOL!

Hope everyone has a good weekend!

It was a nice Friday trading day, eh? Hope you all caught mucho pips!!!

Thank you Pips,
you have a good weekend too.

Mike