4 Hour Strategy (MACD)

Thanks for all your efforts. I am on leave this week so I will have time to trade during the day. Will be on Skype regularly as well on FF and on FxTradleblog forum detailing my trades there.
Phillip

Quick note here:

I'm wondering if you guys are wondering why I became involved with this thread? The reason is pretty simple. The MACD has always been one of my favorite indicators to have on the charts. I can't tell you how many hours of chart time I have spent with the MACD tweaking this or tweaking that. Looking for the crossover signal line when the RSI is here or the stochastics are there. I was a TradeStation user a while back and spent a lot of time with EasyLanguage code...searching. I even started a thread in the Trading Systems forum here titled Histogram Trading http://www.forexfactory.com/showthre...ing#post192545
I was looking for the upturns and downturns of the MACD histogram, but something was missing so I was still...searching. I posted this around the same time that Phillip posted his method. I was thinking along the same lines as Phillip was with the MACD but he was and will always be way, way ahead of me. I am 100% sure that I would have never come even close to the rules that Phillip has given us with his method. Again, thanks. I abandoned that thread I started altogether and joined in here. It's as simple as that. So, the thanks I am returning is the work on the website. It's all about giving something back....


Web site updates...

OK: The Weekly Review link should be good to go any time now. My initial thoughts were to have a review of every major pair chart with comments on the set-ups and trade entry and exits. This would have taken a lot of communication back and forth with Phillip and a lot of time to get done for the site...a lot of time. Honestly, right now it takes about 10 to 15 hours a week so far to get things formatted correctly, files put in the correct folder, and loaded up on the server host...which can be slow at times. Thanks for the clicks so far, every little bit helps. So, since I already have a full-time job the weekly review link will be the mp3 files and docs that were uploaded to the thread for that week. That should make it easier to locate files if you were gone for a week or so. Also, I added a link to download the Market Rhythm mp3 files from Phillip under the Market Rhythm link. This is really important info here especially when entering on the 1 hour chart. I'm not sure why I didn't include that in the first place...duhhhh. And, I just completed the 1 hour entry page. Before this link is posted, or any method info for that matter, I have to get the okee dokee artichokee from Phillip. Gotta make sure I'm pickin' up what he is puttin' down yo...werd. In other words, I'm just making sure that what I am saying is what Phillip's method is saying. I'll post a head's up here when the new info is 'green lighted'...


Stay tuned....

I had to squish things down here to get this in...

The strength of the market. This is a daily chart of the EUR$. On the bottom is the good ol' RSI. Notice the new highs in price and the subsequent peaks in the MACD and RSI. With the exception of the red vertical line with the price high, the bull is running. Price is at the top of the channel and we may be in for a little breather here...just something to think about.


Post # 7039...READ IT!!!

After reading through all the pages i make this conclusion :

regarding the major 89,200 ma, 365ema and major support/resistance (monthly,weekly,daily)

1. if price pierce and close above/bellow one of the ma/support/resistance line it tends to back and tested the ma/support/resistance line before resuming the current trend

2. the current trend can be determine by where the price current standing in 4H Time Frame if it bellow the 89 the trend was on bear mode if it above the 89 it was on Bull Mode

*my Questions : if price oscilate beetween 89 and 200 ma and than price already in 89ma area and macd performing RT it will go back to 200 ma area but beetwen this 2 ma i have support line could i just ignore this support line and aim for TP @200 ma??


regarding the smaller ma 8/21 ema

1. if price pierce and close above/bellow the 21 ema it tend to come back above/bellow the 21 ema before resuming the direction
ex : if price in Bull mode ith price pierce and close bellow the 21 ema it will come back to above the 21 ema before resuming to the downward

*my Question : can i take the short trade after the price come back above the 21 ema?? because after i do some back testing especisally and cable pair, after the price pierce and close bellow 21 ema and performing doji/shooting star 1/2 candle before in bull trend, it come back above the 21 ema and then resuming the trend??

2. 8,21 ema use for determine the current speed of the trend, if price only came bac to the 8 ma the trend was strong if price come back to 21 ma the steam was loosing the momentum

regarding the market rhytm

1. this is the most valuable lesson, i hope i can feel the rhtym of the market beat soon

*my Question : if im not mistaken at 7 Sept 2007, there are long bull candle at E/$ pair and after that price never/barely touch the 8 ma, i notice that phillip was take a long trade, what i want to ask is? did phillip purely take the trade just on market rhytm or looking some confirmation at 1H TF


i know it's along post and maybe some of my Q's already been asked in here, and i miss to read it, but hopefully some of you can answer my Q's

and THANK YOU VERY MUCH for phillip and all of u that contribute in this thread

-Ernest

PS: where i can find the link to the skype chatting room? b'cause i already search the tread and found 2 link 1 for daily and the other for 4 hour macd, but the room was kinda dead so can somebody give me the link? thank u

@ palmer : i have sHs macd pattern performing on 4 hr TF how do u anticipate this kind of price action, and i notice that price was getting higher and macd was getting lower, if im not mistaken i read bout it in this thread it was macd divergence

hi taunted, the euro 4hr chart is showing a shs. What I will do when I see such pattern, i will defined the neckline. If it breakthru the neckline, I might consider to short it, if the r:r is good.. Right now, the eu is at the top of the channel, with the shs, we should anticipate a downmove... Hope this helps..

taunted:

What shauny said, the neckline break is how the HS pattern is traded. With price hitting the top of two channels on two timesframes and the probable HS pattern, this might be setting up for a little correction to the downside...I'm watching...

thank u shaun and palmer for u reply,

so i u guys anticipate the macd pattern as well, cause i did not see sHs pattern on the candlestick or maybe i need to see more carefully??

the light blue lower channel trendline is the neckline. The current pattern formed is not really a clear heads and shoulder, it is however named slanted heads and shoulder if i'm not wrong..

ahh thanks for u pic shaun, i need to go through again bout candle pattern

I did this for someone. See if it makes sense and use it. Remember that it is high risk trading.

Remember that the boundaries in which the motion is taking place has to be established to do countertrend trading.

Here is a conversation we just had on skype about this trades.

Phillip do you think it was possible to avoid a wrong trade on point 5 on your last tutorial
[08:14:56 PM] Mike says: Look at the MACD .it is below -45.Phillip could it help us?
[08:15:19 PM] Mike says: sorry .but it's after break out.
[08:15:34 PM] Phillip Nel says: It depends on the type of candles that is forming at that specific point. MACD migh have given divergence allready which could indicate possible downmove, then you stay in the downmove you took from the upper TL to give your position the chance to go through
[08:16:50 PM] Phillip Nel says: I see that MACD has given sHs prior to that entry so you could decided to stay in the short and not take the long at that point
[08:17:20 PM] Phillip Nel says: sHs on MACD
[08:18:08 PM] Phillip Nel says: You have to evaluate the motion prior to that bottom TL test to see if it indicates anything of a break through
[08:19:52 PM] Phillip Nel says: Does it makes sense
[08:20:55 PM] Alexfot says: How to evaluate it Pnllip?
[08:21:02 PM] Mike says: exactly
[08:22:20 PM] Phillip Nel says: Between trade 4 and 5 the price failed to make another higher high to reaffirm the uptrend but make a lower high which was the right shoulder of the sHs indicating that the upmove might have been over
[08:23:50 PM] Phillip Nel says: It also went below the 21 and one of the rules is that if it goes below 21 it might test it again and then moves to 89
[08:24:06 PM] Phillip Nel says: Which it did.
[08:25:03 PM] Alexfot says: yes that's perfect
[08:25:08 PM] Phillip Nel says: lots of emotion to indicate a possible end of uprun
[08:25:52 PM] Phillip Nel says: But even if you missed it you still had 4 wins and 1 loss
[08:26:24 PM] Phillip Nel says: That is why I like to stay with only 2-3 pairs at the most.
[08:26:40 PM] Alexfot says: yes and we can see that last one was different
[08:27:06 PM] Phillip Nel says: There was also no green candle

Hey Shauny , Palmer and Taunted,

I got a sHs on the MACD 4hr as well, got in earlier on the 800-1200 close. What i noticed from your chart (Shauny) that your MACD did not look like mine. Perhaps different charting program but you had that sHs on the price action.

Which looked like a slanting double top, clearly testing the upper channel resistance. With price not being able to close higher than 1.4130 , a short signal appeared.

Also look at the H1, MACD formed a mini sHs. (also at the 1200 close). Together with the divergence, it looks like a solid countertrend trade going back to the 21EMA before moving back to the preceding trend.

I've got a question though, without using a trailing stop, what is usually the benchmark BE you guys set once the trade is going your way. I'm about 12-15 pips now in profit. (it went down to as low as 1.4067 but wasn't around to move it to BE, currently moving to BE , worry it won't have enough room for it to move)


Cheers,
Mike

thanks philip for that post, everyday reading the threads from earlier posts (i'm in pg 130 now) and posts from you are making things so much clearer now.

Dear Mike

i dont take that trade b'cause im not familiar with the slanting head pattern


rite now im wathcing the cable and euro daily, there is a chance both pair will perform shooting star on daily candle, humm, tommorow will be cautious if im going to long both pair, still dont know what to do though


-Ernest

HI, i finnally did the written Doc, sorry it is late, was busy. it is from post 7039, euro anticipation. best regards,
NAdia.

taunted:

My MACD HS doens't look to good now that I think about it and the price formation itself isn't showing it either. MACD bars are 'red' already. Price might be trying to test the 21 ema also.

Mike:

as far as moving the stop goes. When the positions move in the money, hopefully with the first target hit, I may use those pips to tighten the stops on the remaining lots. If the market blows past the 1st target...it's really a matter of where the s/r levels are or how far away the 8/21 area now is. Sometimes I've used the area between the 8/21 as a s/l area as well. When the market is trending well (rhythm strength is +2 for a 'while'), and price is hugging the 8ema, the first close above/below the 8 'usually' signals weakness. At least for me it does. If those positions now get stopped out...then what?

What might happen next?...The 21 EMA is the next 'step'. When the 4hr comes back to the 21, this is where the market rhythm comes into play and you should start thinking about re-entering the trend and taking a look at the 1hr for a quicker entry. But, you have to have the confidence that the price WILL continue. Or, is this a Rt or Rb forming? Then it's, where's the channel, trendlines.....I think I just got off track a little...

Website with Weekly Review and 1 Hour entry should be up this evening...

dear ernest,

my apologies, the slanted double top...i made that up...
it looks like a double top but it's slanting against the channel trendline.

with the head and shoulders and divergence on the MACD, i took the odds on, only that stoploss was a problem...tried using the Phil's 30% and 45% retracement for the SL.

Did work and I was live for the 1st 2hours so i could move my SL to BE.

Yeah the daily on the Cable , looks like a shooting star is forming. If that happens, the MACD should sure a trend continuation. For the Euro, the daily seems to show bulls are losing momentum (consistent with the 4hr). MACD round top forming.

We'll see what unfolds....

Cheers,
Mike

Oh yeah...that 1st TP 2nd TP as per the PDF. Thanks!

This is for those who have difficulty understanding spoken English. For the accompanying chart, go to the original post "7040."

For those who have difficulty understanding spoken English. Refer to original post 7053 for the accompanying chart.