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4 Hour Strategy (MACD)

  • #7,001
  • Sep 20, 2007 12:14pm Sep 20, 2007 12:14pm
Just a thought..

With the E$ trending like it has been, it would be a good time to go over the Market Rhythm principles of Phillip's method to look for re-entries....

yo
  • #7,002
  • Sep 20, 2007 12:22pm Sep 20, 2007 12:22pm
I have reviewed the market rythem. I have a question. It seems like many times it starts bouncing off the 8ema without coming back to the 21. Is it best to continue to be patient and wait for a 21 bounce with confirming macd??

Thanks
  • #7,003
  • Sep 20, 2007 1:02pm Sep 20, 2007 1:02pm
Quoting Palmer
Just a thought..

With the E$ trending like it has been, it would be a good time to go over the Market Rhythm principles of Phillip's method to look for re-entries....

yo
Hi palmer. i am looking at 1 hour for a possible early entry . getting on the train a little too late. Need to get back in the action. Been kinda OUT OF IT!!!
TRADE WHAT YOU SEE... FOCUS ON SUCCESS
  • #7,004
  • Edited 4:24pm Sep 20, 2007 1:29pm | Edited 4:24pm
Quoting mike1349
Dear Pip ,
Thanks for the comment.I am confused here.if you look at the attached chart we had MACD green on last break out (point 1).then we waitted for retracemend and we missed the MACD confirmation till now.In point 2 we have another break out and MACD confirmation but again we should wait for retracement and may be we miss MACD confirmation again.(I mean MACD turns to red)
So now my question is here,what is the best time to enter in this situation or when the market is moving fast.
I had the 1HR confirmation before candle NO 2 closing.Am I suppose to enter at that time?

Thank you
Mike
Hi Mike,

This is where your testing can come in very handy! As I see it, there are 2 ways to play E/U right now, based on the chart you show. Here are the scenarios and how you can plan the trade. The assumption is that E/U is strongly trending, and has already broken out.

1. After candle 1, the MACD turns red. It is in consolidation mode and price is holding pretty horizontal. You can take the odds on ahead of MACD confirmation for a long by placing an entry order a few pips above the 8 EMA and your stop a few pips below the lowest candle low for the consolidation. Your TP is something you would have to figure based on your methodology b/c we don't really have any historical/recent price activity to target other than the highest high. This is a high probability trade in a trending environment, but not guaranteed as price has barrelled through an incredible psychological barrier.

2. Again, this relates to the assumption that E/U is trending (remember the MACD will give false counter-trend signals during periods of consolidation). You can find the resistance line for the consolidation pattern and wait for price to close above it (you can use the one hour to identify the area and watch the candles for a close). Then you can enter either at the break or wait for a retrace to the line w/stop below the lowest low of the candle. Again, you will be acting during the candle that will eventually turn green on MACD.

Both the methods above are typical trend trading entries. I, personally am a bigger fan of #1 than #2 because I know where I might meet former resistance and can lock in a few pips or move trade to BE. #2 may leave you holding the bag with pips leaving the account -- you just can't be too sure how far price will move past the breakout or how long it may take.

This leads back to the importance of profiling/identifying your trading environment to understand how the MACD may be giving you your signals and how price action is used to base a decision. Just remember, in a strong trend the "red" bars or round tops/round bottoms are most likely consolidation signals letting you know that the trend is taking a breather.

Hope this didn't hurt your head too much to read & I do understand how frustrating it is to figure out when to apply certain trading techniques to the market. Always consider support and resistance when planning the trade along with your definition of the market. Then decide what to do as far as formulating the trade plan (entry, stop, tp, what you see, etc.)

Happy trading,
Pips

PS...I actually prefer to trade range-bound markets b/c they are easier for me to plan trades from -- don't mind a trend when there is historical data -- new highs make it hard to figure price guidelines -- you will have to use extended trendlines as a guide. Funny, eh? We as traders are supposed to love a trending market

NOTE: WHEN I USE THE TERM BREAK....I MEAN A CLOSE ABOVE, NOT JUST A SPIKE....SORRY FOR THE CONFUSION!
  • #7,005
  • Sep 20, 2007 1:49pm Sep 20, 2007 1:49pm
Quoting gustavo868
Hi pips
I agree that cable has a huge donwards pressure, its a high volatility enviroment, and i have problems to get entry signals, and when i get them R:R its bad.
And also in my case that i ve trading for 8 months, its the first time that i see the Euro breaking out while cable consolidating.
Another thing: where do you get option barriers data as you mentioned before. I saw something at dailyfx+, is that what you use??

Can you show us your approach and charts in terms of market rythm, tl and s-r;; That would be so helpful...
sorry i didnt mean to bother you, but im tryng hard to get into this method.

thanks more than a lot...
Hi gustavo,

Option Barrier info comes from Bloomberg and Daily FX news feed (don't read it as much now that I have to go to the website instead of direct plug-in to my tradestation). Don't pay too much attention to them, because they can mess up a really good trade -- they hold until the market gets extreme momentum. Learn to read the motion of the market, it is more important. & the barriers will always show as extreme resistance on your charts.

If you have read through the thread, there was an extensive discussion re: my way of drawing support and resistance lines. I will be happy to post charts again with my thoughts of what price may do I spend a lot of time in front of the "live" action too, watching price movements (and I trade short term frequently). This gives me a feel for the market and helps me anticipate where I want to get in. For Cable, (and I'm not sure I really recommend trading it right now unless you have a good feel for its motion -- I thought it was setting up a bullish pattern on the daily charts, but I think I might have misread it and it may actually be setting up a bearish change in trend (price keeps getting rejected at the 20 SMA on daily charts (not part of 4 hour), even though it is using the 89 in its motion (price is stuck between 200 and 20 on daily, without closing above the 20....hmmm)...sorry, got off topic...when I trade cable with the 4 hour -- I identify places where I want to enter based on lines and IT/IB and how the MACD direction is going. The candles have been too big to enter on from 4 hour, so my trades are planned with better price points for entries along w/my read on market and are confirmed on 1 hour chart.

I'll post this in detail later, I have to get some other things accomplished and I'll try to get my charts up for you w/explaination by tomorrow....

Happy trading
Pips
  • #7,006
  • Sep 20, 2007 2:27pm Sep 20, 2007 2:27pm
Quoting benniardi
Hm.. where did you enter? coz the chart showing like U-turn....
I entered at the 2 arrows on the hourly. First Arrow was identified and inputted as limit order (triggered while I slept in ...and had a very tight stop of 20 pips...entry was 1.9955. Second Arrow = second entry made b/c of higher swing lows and IT pattern closed above. Entry was made at close of candle and was in harmony w/4 Hour Roundish Bottom. Entry = 1.9997

Reason: 1st entry was made based on the round top and drop in price for Cable, I believed that the pair was in bullish mode, but retracing a bit...Honestly, this entry was planned based on the daily chart and the Higher High/Higher Low of previous candle (even though it was bearish candle)..

2nd Arrow: Entry made b/c of bounce from support line on 1 hour, also uptrend support line on 4 hour -- Round bottom formed -- and current MACD bar Xing 0 line..Thought price looked like a W pattern forming. This stop loss was a bit larger at 55 pips (below the 1.9950 low)...

Additional reason for trade: I believed that price was retracing to broken resistance line from rate decision and would continue upmove based on dollar weakness. Had I been awake, I might have cancelled the order....

Horizontal chart = Hourly vertical = 4 hour

All lines were present before candles had formed
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Cable 092007.gif Size: 30 KB
Click to Enlarge Name: Cable 0920074hr.gif Size: 16 KB
  • #7,007
  • Sep 20, 2007 2:30pm Sep 20, 2007 2:30pm
Quoting JimTatum
I have reviewed the market rythem. I have a question. It seems like many times it starts bouncing off the 8ema without coming back to the 21. Is it best to continue to be patient and wait for a 21 bounce with confirming macd??

Thanks

Hi Jim,

the 8/21 tell you the "speed" of the trend/trade. If you see it bouncing off the 8 -- you can take the odds on there if you wish. Just be aware that it is possible for price to return back to the 21 before continuing upmove.

Nice observation!

Pips
  • #7,008
  • Sep 20, 2007 3:30pm Sep 20, 2007 3:30pm
Nadia:

I'm not sure what causes these 'episodes'...it might be tunnel vision while trading and you just have to walk away for a while, even during a winning streak. We all need to come up for air now and then. We're here for ya...

Pips:

You're the man...I mean the woman


JimTatum:

Sometimes when the trend is really strong, that may be as far down as it goes for a while. When it finally hits the 21, that may also be a Rt forming. So, your stuck with either taking the Rt, which is a counter trend trade, or waiting for the price to bounce off the 21....which it may not and keep going south and you end up missing out on the Rt. You can look at the 1 hr and look for confirmation when the price there hits the 21 and then starts to move up again. Each horizontal line on the 4hr chart corresponds with one of the four 1hr candles on the 1hr chart within that 4hr candle...did I say that correct?
Attached Images
  • #7,009
  • Sep 20, 2007 3:34pm Sep 20, 2007 3:34pm
Oh yeah...be sure to make the 8EMA a hard profit target on the 4hr when the trend is running like this on a Rt. It may be all you get. "Greed, for a better word, is good." - G. Gecko. But, you won't go broke taking a profit either...
  • #7,010
  • Sep 21, 2007 5:20am Sep 21, 2007 5:20am
Hi Plamer and Ira thansk for your support. and also to the forum member i would like to apologize for not posting this week. I have not abonden this system . but my confidence seems to have abondon me. I dont know if it is a normal phase for a trader. I am 5 months into learning forex. and going through a lot. the simplicity can be so complex sometimes. I did failry well last week. But this week i ve been i guess out of rythem, i think i was so focused on Cable that i let the oppurtunity with euro slide by. Sometimes something is so clear and right infront of you and you cant see it. I guess it is a mistake to try to figure something out when it wants to be left alone, and outof range of my trading skills. Anyways. thanks for listening as always. I am recovering from my tunnnel vision. and hope fully will be posting my trading plans soon again. So i can contribute to the forum.Trade well and pip plenty.
Nadia.

P.S . this post is not to discourage my fellow traders but just a way to encourage them if in case someone else is going through or gone through this phase.
TRADE WHAT YOU SEE... FOCUS ON SUCCESS
  • #7,011
  • Sep 21, 2007 7:06am Sep 21, 2007 7:06am
Quoting BIL2205
Hi Plamer and Ira thansk for your support. and also to the forum member i would like to apologize for not posting this week. I have not abonden this system . but my confidence seems to have abondon me. I dont know if it is a normal phase for a trader. I am 5 months into learning forex. and going through a lot. the simplicity can be so complex sometimes. I did failry well last week. But this week i ve been i guess out of rythem, i think i was so focused on Cable that i let the oppurtunity with euro slide by. Sometimes something is so clear and right infront of you and you cant see it. I guess it is a mistake to try to figure something out when it wants to be left alone, and outof range of my trading skills. Anyways. thanks for listening as always. I am recovering from my tunnnel vision. and hope fully will be posting my trading plans soon again. So i can contribute to the forum.Trade well and pip plenty.
Nadia.

P.S . this post is not to discourage my fellow traders but just a way to encourage them if in case someone else is going through or gone through this phase.
Hi Nadia,
I am so happy you wrote this,if not I was going to have a terrible weekend.I had the same feeling this week.
when you look at the charts live it looks so complicated.TL's,Fib's,S/L's,.......
but when look at them at the end of the day you see how simple they just followed the rules.
Then I get tottaly hopeless and I chew myself
Anyways now I see it's the way (I guess)that we should all go.
I hope we end up with a lots of pips.

Regards
Mike
Failure, is a wonderful teacher!
  • #7,012
  • Sep 21, 2007 7:10am Sep 21, 2007 7:10am
JimTatum:

I entered this earlier per the 1hr with the 4hr bouncing off the 8EMA...up about 60 pips on two different entries....Looking at the .4100 area as a target. This wasn't posted on the blog.
Attached Images
  • #7,013
  • Sep 21, 2007 7:46am Sep 21, 2007 7:46am
Quoting Palmer
JimTatum:

I entered this earlier per the 1hr with the 4hr bouncing off the 8EMA...up about 60 pips on two different entries....Looking at the .4100 area as a target. This wasn't posted on the blog.

Palmer,

Thanks for showing me that. So you made this entry strickly on your feel for the market rythm? Cause I do not see confirming macd. Are there times you we should make entry without confirming macd. Or is this practice for more advanced traders? Or is there confiming macd and I just missed it.

Thanks
  • #7,014
  • Sep 21, 2007 7:51am Sep 21, 2007 7:51am
If you took the 2 shorts off the Macd and closed at the 8MA you would of done fine. Remeber we are in a uptrend with no resistance and if you are shorting your going against the trend. It can be done but dont look for 100 points until it starts to crap out.
Keep taking CT trades, I need more money
  • #7,015
  • Sep 21, 2007 8:29am Sep 21, 2007 8:29am
Quoting BIL2205
Hi Plamer and Ira thansk for your support. and also to the forum member i would like to apologize for not posting this week. I have not abonden this system . but my confidence seems to have abondon me. I dont know if it is a normal phase for a trader. I am 5 months into learning forex. and going through a lot. the simplicity can be so complex sometimes. I did failry well last week. But this week i ve been i guess out of rythem, i think i was so focused on Cable that i let the oppurtunity with euro slide by. Sometimes something is so clear and right infront of you and you cant see it. I guess it is a mistake to try to figure something out when it wants to be left alone, and outof range of my trading skills. Anyways. thanks for listening as always. I am recovering from my tunnnel vision. and hope fully will be posting my trading plans soon again. So i can contribute to the forum.Trade well and pip plenty.
Nadia.

P.S . this post is not to discourage my fellow traders but just a way to encourage them if in case someone else is going through or gone through this phase.
Hi, Nadia! This week actually was a bit confusing and simple at the same time, confusing b/c all ma's on Euro were below and we did see any crosses and we got used to them, but the price was always above 8 ema and this is a simple element of situation, just go long and that's all. We people are inclined to complicate simple things, so make it KISS and you will always be a winner. Hope that helps.
  • #7,016
  • Sep 21, 2007 8:33am Sep 21, 2007 8:33am
Yes, this entry was done without a real confirmation on the 1hr MACD. The 8EMA has been hard support so at the first sign of a bounce on the 1hr, that was it for me. I didn't take the Rt on the 4hr, too scared of it because of the strength in the trend. I exited at .4090, decided to take what I could get on a Friday. I'm getting some 4hr/1hr stuff together for the website. I run everything by Phillip first and get his ok before anything is added so everything takes a little time to get done....


Peace
  • #7,017
  • Sep 21, 2007 10:33am Sep 21, 2007 10:33am
For those who have difficulty understanding spoken English.
Attached File(s)
File Type: doc Phillip Nel- DailyWrapUp- 19Sept2007- Written copy.doc   5 KB | 537 downloads
File Type: doc Phillip Nel- Daily WrapUp- 20Sept2007- Written copy.doc   6 KB | 488 downloads
  • #7,018
  • Sep 21, 2007 11:49am Sep 21, 2007 11:49am
Quoting OldDog
For those who have difficulty understanding spoken English.
Thank you
  • #7,019
  • Sep 21, 2007 12:46pm Sep 21, 2007 12:46pm
Hi phillip and all

Many thanks for you Mr.phillip .. its a fantastic rules .. now I think we will waite for RT or TC until it back a gain to 89 and go up again

Best wishes
Ammar
Attached Image (click to enlarge)
Click to Enlarge Name: 1.gif Size: 28 KB
  • #7,020
  • Sep 21, 2007 1:10pm Sep 21, 2007 1:10pm
Quoting aboammar
Hi phillip and all

Many thanks for you Mr.phillip .. its a fantastic rules .. now I think we will waite for RT or TC until it back a gain to 89 and go up again

Best wishes
Ammar
Hi Ammar,

been meaning to post this for a while...You do a very nice job with your charts!

Have a nice weekend,
Pips
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