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4 Hour Strategy (MACD)

  • #6,941
  • Sep 17, 2007 2:35pm Sep 17, 2007 2:35pm
[quote=Richard7;1597176]
Quoting pips4uandme
Hi Palmer!!!!
Quoting pips4uandme

Welcome back! Totally feel the lack of rhythm when not in the market for a week...I'm always out of sorts after the weekend....]



I have a confession to make. I used to use Forex Made Easy (I know, I know, don't rub it in) and almost nobody coud get it to work, but there was one guy named Willie who did, and I realize now that he was just getting into the rhythm of the market and trading it that way. He used to call it 'Willie's Camel Ride'. "Can you feel the beat?" he used to say. I would think "no, all I see are these stupid wiggly lines and flashing arrows", but now I see what he was getting at. Market rhythm works even if your software doesn't.

Anyway, I'd like to hear how you guys 'keep the beat'.


Thanks,
Richard
Hi Richard, dont feel bad, i confessed to using 4xmadeeasy too a while back, for me it was like taking a road trip without a map. Willie Guerva was or maybe is still running the L.A. 4x group and i heard him speak there emphasising his camel ride. That was the only madeeasy guy that made sense. Still, i never did well until i found this forum. THANK GOD for Phillip and all the excellent people who contribute here.
  • #6,942
  • Sep 17, 2007 2:35pm Sep 17, 2007 2:35pm
I have problems with my recording software on the new laptop. As soon as that is sorted out I will make up for it I promise.
Phillip
  • #6,943
  • Sep 17, 2007 2:36pm Sep 17, 2007 2:36pm
Quoting Ryanmcd
I have read through most of this thread now, looked at the 5min also but I did not like the 5min as much. What I want to ask is how you scale out of trades? It seems 90% work but I wanted to see where you look to take some off the table. I was thinking with 10 contracts taking 1 per 10 and putting the stop @ cost around +20ish or if it starts to come back on me. Any ideas?
Hi Ryanmcd,

In addition to Palmer's advice, if there aren't any MA's to use as a target, use resistance lines or Fib levels (whatever your testing has shown you to be best for your style of trading).

Personally, I think the 10 pip goal is not nec. a great idea. Think it may cause you to chase to many entries and miss the good moves expected from a longer time frame trade plan. Test your idea on historical data, along w/taking profit and moving to BE at specific levels and see how you would do and which method would benefit you most. The reason I have a not so good feeling re:the 10 pip method is b/c of r:r ratio and probability of trading too much.(counter-trend trades it seems to be a good idea to take some pips off the table around 20 and move to BE). Just my opinion.

Happy trading,
Pips
  • #6,944
  • Edited 3:16pm Sep 17, 2007 2:53pm | Edited 3:16pm
[quote=Richard7;1597176]
Quoting pips4uandme
Hi Palmer!!!!
Quoting pips4uandme

Welcome back! Totally feel the lack of rhythm when not in the market for a week...I'm always out of sorts after the weekend....]

Pips,

In the process of backtesting, which by the way has been a real eye opener for me with regard to market rhythm, I have noticed that it IS hard to get back in rhythm when you are out for a while, or even if you have a little losing streak. I'd be interested to hear from you and/or anyone else about how you deal with this, how you get back into rhythm?

I have a confession to make. I used to use Forex Made Easy (I know, I know, don't rub it in) and almost nobody coud get it to work, but there was one guy named Willie who did, and I realize now that he was just getting into the rhythm of the market and trading it that way. He used to call it 'Willie's Camel Ride'. "Can you feel the beat?" he used to say. I would think "no, all I see are these stupid wiggly lines and flashing arrows", but now I see what he was getting at. Market rhythm works even if your software doesn't.

Anyway, I'd like to hear how you guys 'keep the beat'.


Thanks,
Richard

Hi Richard! I see you have gotten lots of good advice from the forum!!! But I want to chime in too (see my hand waving in the air... ).

First, I want to commend you on how hard you have been working studying the method!! You are doing a FANTASTIC job!!!

I have 2 different answers depending on the circumstances:

1...I've been trading poorly...seem to be on a losing streak...what the heck is going on???????

I have a rule when I'm trading poorly, entering too many trades or giving too many pips back. If I take a large loss (more than 3% of my account) or if I have 3-4 losers in a row or if I am up >4% in the account and keep trading and lose the gain, I am required to backtest 50 trades before I can take another live trade. Then I require a comparison between those trades tested and actual trades taken. The purpose is to identify the problem area AND to CORRECT it before it becomes a real problem. It also help put my focus back on the market and out of my head (and points out how many good trades were really showing themselves and how many I wanted to be there). Phillip has said this before, and it is sooooooooo true.....(even though it isn't intuitive)....The less you trade, the more you make. Trade defensively and protect pips (oops going off topic).

2. After the weekend, I can't "feel the market."
I keep a running journal on the pairs I trade, noting what they have been doing and keeping a running dialog of my thoughts, what I think may happen, what I am waiting to see, and what the candles look like. I do this a few times a day. On Sunday, I read what I wrote during the week before to "refresh" my failing memory. If I still don't "feel" the market, I backtest a week or two worth of data leading up to the current day (sounds like Ira!)...Lastly, if I'm still unharmonic...I sit out and watch the market live for a while. If the rhythm doesn't click, I'm confused and that is a sign to stay out! There is nothing there for me yet -- the market hasn't shown it's hand. I rarely enter on market open anyway unless there is an obvious price bounce/rejection area w/a gap and price hasn't re-tested a major MA or broken s/r line. The best thing to do is review the last few weeks, talk to yourself about what price is doing, look at your lines for s&r, look at the direction/spacing of the MA's and where the 8/21 are in relation to the 89/200/365, note where price is, what the MACD is saying and what you would expect price to do next....then wait until London opens...better yet, wait for US to come on line too...If price did what you expected, then chances are good that the market is still in rhythm & you are too. Entering on Sunday is risky, but if you absolutely feel the market has an opportunity and r:r is good, then trade smaller than normal until it is confirmed.

Happy Trading!
Pips
  • #6,945
  • Sep 17, 2007 2:56pm Sep 17, 2007 2:56pm
Quoting Robertus
Hey Richard (and others),

my best way for this is demo account. I find the demo quite useful for various things. From getting back to the seat to elliminate the ichy feeling of trading urge when there's no trade according to the plan. (sometimes it is a real challange not to ruin completly the demo account...) Most of the time I loose but the patience and the good mood is back.

Hope to see other solutions for this.

Robert
Nice way to protect capital when you just feel like clicking!! Hey, if your bad trades are on demo and the good ones are on live, your method ROCKS!!!
  • #6,946
  • Sep 17, 2007 4:58pm Sep 17, 2007 4:58pm
Hi, Pips!
I was wondering to ask you how you make backtesting. And you answered my question without me asking it. This is very informative , thank you very much.
  • #6,947
  • Sep 17, 2007 5:17pm Sep 17, 2007 5:17pm
Quoting benniardi
Waow, does anyone tried to check the forex options already? It's a great stuff the ISE offers...
Any comments? Wonder if they're already available in intrabankfx or other broker platforms...

Ah ha!!!! Might someone be on the same hunt that I am?! This has the potential to offer a new 'realm' to this method if you will. Forex Options!!!

If you are familiar with options, think about it....Want to trade Phillip's method on the longer term charts like the daily and weekly??? Hmm, but the stops would be waaaaaay to large unless you have a huuuge account. But, you can do this with options. Instead of taking a position and have to worry about getting stopped out....Why not purchase puts or calls per the daily and weekly charts? You risk is limited and the reward can be unlimited. This is the next uh, hmmmmm, chunk that I'm planning for the website. Using Phillip's method on longer term charts with options. Still have some work to do with chart examples and 1 hr supporting the 4 hr charts but the option strategy is on the agenda as well. I've been talking with John Jagerson, the author of "Profiting With Forex" about forex options and with ISE. If you haven't traded options, not to worry it sounds a lot more complicated than it is...unless you're doing reverse calendar spreads, butterfly spreads, delta neutral trades...ahh the list goes on. Anyway, options can be applied to the 4 hour as well. This is just another path for potential profit, that's all. Whoosh, getting ahead of myself a little...

Tomorrow is going to be a really interesting day. Fed news, PPI, oil over $80 a barrell.....Throat feels a little sore. I may call in 'sick' tomorrow

I have come to the conclusion that I am never going to clean my room.
  • #6,948
  • Sep 17, 2007 10:11pm Sep 17, 2007 10:11pm
Quoting alexfot
Hi, Richard!
I think Ira's way to get in to the market motion is the best, I use this technick too.
Could you tell me about 4xmadeeasy, what the indicators they use. I was at the seminar in July, and asked them what indicators the system use, they could not answer. Then they said if you buy it we will tell you, that was very fishy and of course I did not buy it, but still curious how it works. It looked like just 2 MAs cross.

First of all, great answers to my rhythm question. Every one of them was helpful, and I'm not just saying that. I will be able to use something of what every one responded with. Awesome.

As to 4XME, I can't recommend it or any other 'black box' type of software. In fact, I can't recommend any trading system whose cost begins at four figures. Global Tech is a fine company I guess, but they are better at marketing than trading in my opinion. Enough said about it. Everything we need is right here. Please save your money to fund your trading account.

Thanks again,
Richard
  • #6,949
  • Edited 1:53am Sep 18, 2007 1:05am | Edited 1:53am
  •  shauny
  • | Joined Jul 2007 | Status: Still learning and never gonna stop | 127 Posts
The 1hr chart has formed three twicks which could penetrate the price level of 1.9879. Will this support hold for now? And will be a trend reversal to the upside to 8/21ema or even the 200sma? The macd also diverge from the price... I forgot to add that the 4hr chart might be forming a tweezer bottom as well.. We shall see.. I've long the GBP, as the fed is most likely to decrease the rates and it might pushes the GBP even higher.. Will move to BE asap.. its a countertrend afterall.
Attached Image (click to enlarge)
Click to Enlarge Name: GBP Tweezer Bottom MACD Divergence.jpg Size: 71 KB
  • #6,950
  • Sep 18, 2007 2:34am Sep 18, 2007 2:34am
Consolidating for days, followed by this morning's good figures for Swiss production.

Could be moving again?
Gone to a better place
  • #6,951
  • Sep 18, 2007 2:38am Sep 18, 2007 2:38am
Hello Shauny,

I agree with you on the reversal. But I will take it as short term one, targeting around 20041 on H1 (EMA65), where is also the confluence of Fibo 38.2% from 20343 to 19877. In addition, the cable has broken the upper trendline on H1 drawn off 20343 to 19916. May re-enter at retracement to around 19910.
  • #6,952
  • Sep 18, 2007 3:04am Sep 18, 2007 3:04am
  •  shauny
  • | Joined Jul 2007 | Status: Still learning and never gonna stop | 127 Posts
Quoting Elainehuang
Hello Shauny,

I agree with you on the reversal. But I will take it as short term one, targeting around 20041 on H1 (EMA65), where is also the confluence of Fibo 38.2% from 20343 to 19877. In addition, the cable has broken the upper trendline on H1 drawn off 20343 to 19916. May re-enter at retracement to around 19910.
I will take it to the 4hr 8ema as my main target profit. I have taken partial profit already because I do not want the price to turn around on me without getting some juice from it. My reason for taking this reversal is because of the interest rate announcement later. Traders are most looking certain for a rate cut and could spiral the GBP upwards. At present, as we speaks, the 4hr bar is showing a bullish engulfing bar, which might even concluded and added confirmation the reversal has taken place.
  • #6,953
  • Sep 18, 2007 3:23am Sep 18, 2007 3:23am
Hello Shauny,

Thank you for your analysis.

Elaine
  • #6,954
  • Edited 1:37pm Sep 18, 2007 9:36am | Edited 1:37pm
Hi,

I'm not sure about eur/usd so I have switched to other pairs. Here are todays trades:


18 sep 07, 13:15 gmt

USD/JPY

4h chart

MACD couldn't go through 0.000, moves up now

chart shows ascending triangle pattern


long USD/JPY 115.46

sl: 115.16 (-30)

(a)tp:115.85 (+39) half way to sma 200

(b)tp:116.10 (+64) slightly above sma 200


13:40

(a) tp: + 39 pips

(b) sl: 115.51 (+5)

17:03

(b) tp: + 29 pips

I have closed the second trade because there has been a sideway movement for quite a while without clear indication (at least to me) where it would continue to go.

USD/JPY total : + 68 pips





18 sep 07, 15:17 gmt

GBP/USD

MACD indicates long .. we could still get an head and shoulder

ATR 60


long GBP/USD 1.9966

sl:1.9894 (around recent low (atr+20%)) (-72)

(a)tp:2.0050 (ema 21) (+84)

(b)tp:2.0120 (sma 200) (+154)


if (a)tp then (b)sl +/-0


18:35 gmt

actually: 2x + 44

SL: 1.9966 (+/-0)


19:20 gmt

the US Interest Rate Statement triggered (a)TP but it did not trigger (b)TP

= + 84 pips


19:35 gmt

(b)TP got triggered= + 154 pips



GBP/USD total + 238 Pips



Greetings
  • #6,955
  • Sep 18, 2007 10:18am Sep 18, 2007 10:18am
Hello Mike,

I have used the ATR as an indicator for the SL on the GBP/USD trade.
ATR value + 20 %.

Greetings
  • #6,956
  • Sep 18, 2007 10:46am Sep 18, 2007 10:46am
Quoting ashes
Hello Mike,

I have used the ATR as an indicator for the SL on the GBP/USD trade.
ATR value + 20 %.

Greetings
Thanks Ashes.I deleted my last PM by mistake!!
Failure, is a wonderful teacher!
  • #6,957
  • Sep 18, 2007 1:51pm Sep 18, 2007 1:51pm
whoah, look at that USD after the news...
I didn't expect that USD/CAD would go any lower.. .they hit 1.0160 now...
  • #6,958
  • Sep 18, 2007 1:59pm Sep 18, 2007 1:59pm
Crazy movement there
still in learning curve
  • #6,959
  • Sep 18, 2007 2:59pm Sep 18, 2007 2:59pm
ashes: Nice trades...


Glad I took the day off $$$

4 hr charts may take a while to settle out. Going to be interesting to see the long term follow through from here. Sitting back for now. No posts to the blog this week so far....

Trade well.
  • #6,960
  • Edited 5:47pm Sep 19, 2007 3:15am | Edited 5:47pm
19 Sep 07

9:05 gmt

eur/usd

4h

macd round top


eur/usd short 1,3966

sl 1,3986 (-20)

(a)tp 1,3939 (+27) ema 8

(b)tp 1,3900 (+66) ema 21


since I consider the trade risky the sl is tight (-20)


9:49 gmt

thanks to shauny

sl modified to 1.3996 (-30) I don't want to risk more
but sl is now above and not at the double top



11:11 gmt

4h

macd round bottom

usd/chf long 1,1823

sl 1.1790 (-33) below last low

(a) tp 1,1850 (+27) sma 21

(b) tp 1,1885 (+62) below last high


13:06

eur/usd has almost reached my (a)tp but did not trigger it

eur/usd trades closed at - 3 pips ; total : -6 pips

usd/chf trades closed at - 15 pips; total : -30 pips


16:08 gmt

I should not have closed my trades. usd/chf would have triggered (a)tp by now and sl +/- 0 would have made (b) risk free

eur/usd is still heading down and I feel tempted to go short again ... but I won't; enough trading for today

I have closed the trades due to my concern that the news announcements would change direction of the two pairs


23:44 gmt

I have planned my trades but I did not trade my plans. The result are - 36 Pips. If I would have sticked with my plan the
result would have been + 54 Pips.

Lesson learned

Please feel free to comment


Greetings
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