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4 Hour Strategy (MACD)

  • #7,321
  • Oct 9, 2007 2:10pm Oct 9, 2007 2:10pm
Hi Palmer,
Us/JPy is closed in 1hr with green MACD.I guess there is no problem if MACD in 4HR is still red.Am I right?

Regards
Mike
Attached Image (click to enlarge)
Click to Enlarge Name: usjpy.gif Size: 26 KB
Failure, is a wonderful teacher!
  • #7,322
  • Oct 9, 2007 5:26pm Oct 9, 2007 5:26pm
Mike:

No, there is no problem with that at all. I like to wait for at least the second 1hr bar to close, better on the third, and price to close in the upper part of that one hour bar's range; the bar that I plan to enter on. That long green 1 hour bar looks good but those long range bars scare me unless there is follow through on the next candle annnnnd the risk:reward is still there on the 4hr chart. If the trend is there on the 4hr chart, it's just a matter of trusting the method, no second guessing, and enter. Look for the trendlines as well on the 1hr and see how price is reacting there too....
  • #7,323
  • Oct 9, 2007 5:29pm Oct 9, 2007 5:29pm
The new RapidFire scripts are on the website under the Tools link, scroll down to the bottom. These are just BUY and SELL scripts for those brokers that require a special symbol or letter that has to be entered with the currency pair to trade micro or mini lots. You must enter the currency pair and symbol for the CurrencyPair1, 2, and 3, values along with the other inputs and that should do it. Drag and drop the script on to the chart that you want to trade, click OK, and get rich...or something like that....
  • #7,324
  • Oct 9, 2007 5:34pm Oct 9, 2007 5:34pm
Hello,

I've been papertrading the 4h macd system since end of august, until
now with acceptable results. But I still have the feeling that I have not
understood the rules completely, so probabyl I've just had luck.

I have questions:

People in the threads are talking about the rules, eg if on a downtrend the
8ema got tested as support, the currency pair is likely to go back to
21ema.
Where do I find these rules to read them all and learn them?

How do I use the 1h chart to help me confirm the 4h direction?
Is there documentation about this?

By the comments I have understood that it is important to wait until a 4h
candle has closed before entering a trade. Could you please explain what
kind of candle indicates /confirms what kind of movement? Is there a thread
or document about this topic?


Thank you.

Greetings.
  • #7,325
  • Oct 9, 2007 6:23pm Oct 9, 2007 6:23pm
Quoting Palmer
Mike:

No, there is no problem with that at all. I like to wait for at least the second 1hr bar to close, better on the third, and price to close in the upper part of that one hour bar's range; the bar that I plan to enter on. That long green 1 hour bar looks good but those long range bars scare me unless there is follow through on the next candle annnnnd the risk:reward is still there on the 4hr chart. If the trend is there on the 4hr chart, it's just a matter of trusting the method, no second guessing, and enter. Look for the trendlines as well on the 1hr and see how price is reacting there too....

Kind of like this right here...

"We shall see young Skywalker..."
Attached Image
  • #7,326
  • Oct 9, 2007 6:33pm Oct 9, 2007 6:33pm
Quoting ashes
Hello,

I've been papertrading the 4h macd system since end of august, until
now with acceptable results. But I still have the feeling that I have not
understood the rules completely, so probabyl I've just had luck.

I have questions:

People in the threads are talking about the rules, eg if on a downtrend the
8ema got tested as support, the currency pair is likely to go back to
21ema.
Where do I find these rules to read them all and learn them?

How do I use the 1h chart to help me confirm the 4h direction?
Is there documentation about this?

By the comments I have understood that it is important to wait until a 4h
candle has closed before entering a trade. Could you please explain what
kind of candle indicates /confirms what kind of movement? Is there a thread
or document about this topic?


Thank you.

Greetings.
ashes:

The price testing the 8/21 has a lot to do with the Market Rhythm. There are a few downloads about Rhythm on the website and there should be some info on the .pdf method as well.

The 1hr chart is is to be used for getting in on a trend continuation (Tc) signal - when price is above the 89 and has come back to the 21 and resumes the uptrend - a little sooner versus waiting on the 4hr to resume the trend. This is a more technical entry and should only be considered when you fully have the 4hr method down. Some traders don't even take the 1hr signals and trade solely on the 4hr chart. Think about the 1hr charts later, focus on the 4hr MACD patterns and moving averages.

Waiting on the 4hr candle to close. This is where patience and discipline comes into play. There are a LOT of times when the 4hr candle is showing a round top (Rb) or round bottom (Rb) and there may still be 2 hours or more to go before that candle closes. It's VERY tempting to jump in right there becasue you are thinking you are going to miss the move. More often than not, that candle's price action will start to settle back down and price action returns to normal. If you jumped the gun, the pips are now turning negative. Just look at a chart and check out the entire range of a candle. How many times do yo see a candle closing at the high or low of the range? A few do, but not all of them. Unless it is an unexpected news event or something. This hold true for the 1hr as well.

There are also a few .pdf files on the website under the Tool link that have several months worth of 4hr and 1hr charts to print out and make notes on.

Hope some of this helps...


I must go take a shower...been a long day.
  • #7,327
  • Oct 9, 2007 7:03pm Oct 9, 2007 7:03pm
Thank you Palmer your answers have helped.
I'll keep on reading, learning and trying.

Regards
  • #7,328
  • Oct 9, 2007 7:08pm Oct 9, 2007 7:08pm
It took me a couple months to soak it all in but, I got in early in th thread. The MACD has always been one of my favorite indicators so I just jumped in on this train with a one way ticket....
  • #7,329
  • Oct 10, 2007 12:19am Oct 10, 2007 12:19am
Quoting ashes
Hello,

this is my trade for today:

9 oct 07

19:14 gmt

eur/usd has probably found resistance at ema21

macd doesn't show clear indication but the probability is high
for the eur/usd go go back to ema8

eur/usd short 1,4084

sl 1,4117 sma98 (out of downchannel) 2x -33

(a)tp 1,4050 ema21 +34

(b)tp 1,4015 last low (still in downchannel) +69

19:51 gmt

oops, this doesn't look too good... I'm at 2x - 30 pips


what have I done wrong?


I apprechiate comments and corrections

Greetings
Hi Ashes,

allow me to make a few comments on your trade. You are writting that MACD doesn't show clear indiction, I think you have taken the deal without a MACD signal, at least on my chart there is still no signal to go short. Yes, I'm in favour of down move too, but I'm waiting for MACD red bar, for the close of the candle on 4H, to tell me to pull the trigger. I maybe watching for 1H conformation, but I'm not very confident with this technique yet.
Nothing prevents this thing from going up too, it has closed above 21, except 89 can act as a strong resistance, and we technically in a down trend now. That's why it's important to wait for the close of the signal candle.

It looks like your SL was hit by a pip, I think there is also a problem as you didn't give a chance your trade to develop. Yes, you did the right thing putting it above 89, but you should have given some more room to it. I have learned a very good thing from Pips: SL + spread + fudge factor (any number you like today), that really saved me a lot of pips. Your SL must be in place where you exactly know that this trade went wrong and doen't have a chance. For example, in this situatuation, if the price breaks through 89, that it would be a sign that down move was false.

Please, don't take it as criticism, as I just wanted to help, and learn myself too. Here are a lot of people on the thread that helped me greatly and still helping. Please, keep up with posting your trades, as you are doing good job, and it's very nice to watch your progress!

Regards, Ira.
  • #7,330
  • Oct 10, 2007 1:06am Oct 10, 2007 1:06am
Quoting ejiexe
I look at it and it follows the rules. so i took the short on
Hi ejiexe!

Yes, this pair was following market rhythm, but I don't understand the short entry. Did you enter 12 - 16 hours before w/the roundtop at > 45 w/Macd turning and price moving away from resistance and target 8/21 for TP? If so, that was an excellent trade! Or are you still short with a stop above the recent high expecting the pair to eventually go to the 89?

My earlier post today for giogio15 was really to get people thinking about what they are seeing on the charts. My bias was for a bounce at the MA long based on market rhythm and trend but the MACD wasn't confirming at the time. Support also hadn't been broken and closed below yet, so I wasn't game for a countertrend trade on the pair (especially w/out confirmation on my chart). If giogio15 had entered solely on market rhythm, the long would have produced +50 pips w/ a stop loss of 20...also a good trade (I find +50 per trade on A/U to be a reasonable target when it is trending -- moves slower than some of the other pairs when moving up...everything moves fast when coming down...interesting, eh?). Hope your trade worked out well. Please share your analysis if you don't mind, just so I can have clarification on the rules. Very much appreciate it!

Pips
  • #7,331
  • Oct 10, 2007 1:21am Oct 10, 2007 1:21am
Quoting giogio15
I see great market rhythm wich is ocured on AUDUSD pair and waiting for MACD to confirm rhythm with signal. My tp will be at the resistance line wich i had drawn on the chart. I think this is a real high probability entrance, isn't it?
Hi giogio15!

Yes, nicely done! Did you enter the trade? & have you taken some profit off and moved to break even yet? Notice how the high from the fed meeting minutes fits nicely into the most recent highs? To me, this is a bit of a warning sign especially since MACD is staying constant at .0015 (just my over control issues...Aud can take a while to move up, but your trade was positive +40 and I have found +50ish a good profit target w/this pair -- but price is still above the 8). My charts are slightly different than the majority of forum users, but the scenario you described would have occurred at the close of my 5AM candle (translation entry = 9AM PST).

No news of importance today so trading will be dictated by the stock market and prevailing sentiment. Just wanted to say good job on describing your high probability entry and appologize if I sounded gruff in my original post. Really am trying to get people to think about the market and get them to plan their trades based on what they see and how they interpret the data, rather than focusing on consensus. Remember, a trader can go long while another goes short, and both can make pips. The difference is in trade management -- stop loss and take profit. Doesn't mean one trader is correct and one is wrong.

Hope this was somewhat useful.

Happy trading,
Pips

PS...Please do your backtesting! I'm a huge proponent of the task!! It will make you a stronger trader, it will help you see what works for you, it will help you see how many trades are triggered by the system, what your average gain is, your average loss, and your average hold time. Essentially, it will make you confident in forming your own analysis and entry and will help you become a self-sufficient trader. Once you master that, it will help you experience the "emotional-free" mindset we need to trade well.
  • #7,332
  • Oct 10, 2007 1:26am Oct 10, 2007 1:26am
Quoting ira
Hi Saka.
I, OldDog and Nadia are writting every mp3 file in turns. Sorry for being late with yesterday's wrapup, but when Phillip posts them I usually have deep night, so I do them in the morning, it will be ready in an hour.
Ira
Thanks,pal. But I don't mean the wrapups each week. I mean the 13 lessons of Philip. I need their written verson
Plan your trades and trade your plans
  • #7,333
  • Oct 10, 2007 1:31am Oct 10, 2007 1:31am
Welcome all new 4 hour MACD traders!!!!

You have found the best thread on the web to teach you trading skills!! This methodology is a complete trading skillset and much info is covered throughout the thread. The system is easy once you "get-it." But, it isn't so easy to "get." Why? Because it incorporates more than just the MACD. This method forces you to look at Price Action -- Support and Resistance, Trendlines, Candle Patterns, etc. Also, it is a longer term strategy that utilizes discipline and patience. You most likely won't have a trade a day -- but you will have good results if you trade wisely. Example, I've had 2 trades from Friday until today and my pips for the month are +200 -- and I'd rather not give them back, so a good trade needs to morph before I enter. As usual, I'm getting off subject -- Yikes!

Where I'm going w/this post -- Please take the time to read through the whole thread! There is soooooooo much info here -- Even if the method doesn't speak to you, if you can take the skills taught here and apply them, you will be a good trader! (and really focus on learning market motion!!! and support and resistance!!!! after that you can decide what works for you best -- Market Rhythm and Support and Resistance trading will make you money!!!!

K... I'm done! Aren't you glad I'm back from vacation? hey....at least I'm not as grouchy as yesterday....right?

Wishing everyone to be the best trader they can possibly be,
Pips
  • #7,334
  • Oct 10, 2007 1:53am Oct 10, 2007 1:53am
FROM PHIL:

EurUsd


08:00 Res against 89. Will wait for move away- Possible 1H entry. Anticipation is short




GbpUsd

08:00 Res against top TL. Wait for further confirmation.
  • #7,335
  • Oct 10, 2007 2:04am Oct 10, 2007 2:04am
Quoting OldDog
Hello again Brandon, -- You won't be able to set up the MACD system on Forex.com to your satisfaction. What you will need to do is to search for a broker who uses the MetaTrader platform, the most recent platform is still MT4 I believe. One such broker is InterbankFX. Another is MIG Investments. Other people may be able to mention more choices. What you want to do is to get a demo account with a broker who runs the mt4 platform. You download that platform from them and start learning how to use it. Then, you can go to the bottom of any page on this thread, where you will see the heading, "Similar Threads." Under that, you can click on the thread called, "MACD Colored Indicator for 4 Hour Strategy..." The starter of that thread is Irusoh, and he developed an indicator that will set up the MACD the way it is used on this thread with extra enhancements such as color changes to show whether the MACD is making higher or lower bars. He has revised his indicator several times, so you can search his thread for the latest one. Good luck to you, and study hard!
Thanks I just downloaded metatrader it seems much better. I appreciate the advice.
  • #7,336
  • Oct 10, 2007 2:14am Oct 10, 2007 2:14am
Hello Ira,

thank you for the comments about my recent trade.
yes, I have realized that I have entered this trade very hasty.
I didn't wait for the candle to close ....
There was no macd indication at all so I should not have entered.
Thank you also about the SL configuration tips.
I don't take your thread a a criticism at all. I'm learning by your suggestions
and I'm glad you've posted them.

Greetings
  • #7,337
  • Oct 10, 2007 3:05am Oct 10, 2007 3:05am
I can't make out the chart at the moment. Many contradicting signals and patterns.

UP?
1. Break above trendline
2. MACD 4 HR currently bullish
3. Bullish flag pattern possibly developing??

DOWN?
1. Divergence 1 hour
2. 89 EMA resistance 4 hour

If 89EMA resistance holds, divergence will play out and possibly fall back into the channel. Bounced off the 89 to the exact pip 1.4130 on my chart. If 89EMA resistance fails, then possible break up to 1.4180 / 61.8% fib.



Hmmmmm!............

Nipper
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  • #7,338
  • Oct 10, 2007 5:22am Oct 10, 2007 5:22am
Quoting saka
Thanks,pal. But I don't mean the wrapups each week. I mean the 13 lessons of Philip. I need their written verson
Hi again Saka.

As Pips4uandme has written before, a team of us has made the written copies of all Phillip's lessons, and Phillip has posted them on the thread. It took me a while to find them but here you go, look at posts # 5924, 5925 and 5926.
  • #7,339
  • Oct 10, 2007 6:22am Oct 10, 2007 6:22am
08:00 Res against top TL. Wait for further confirmation.

12:00 Went through top res line off the 21. Wait for pullback to breakout level. 1H did not produced pullback.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd.gif Size: 18 KB
Click to Enlarge Name: gbpusd.gif Size: 23 KB
  • #7,340
  • Oct 10, 2007 6:55am Oct 10, 2007 6:55am
Quoting pips4uandme
Hi giogio15!

Yes, nicely done! Did you enter the trade? & have you taken some profit off and moved to break even yet? Notice how the high from the fed meeting minutes fits nicely into the most recent highs? To me, this is a bit of a warning sign especially since MACD is staying constant at .0015 (just my over control issues...Aud can take a while to move up, but your trade was positive +40 and I have found +50ish a good profit target w/this pair -- but price is still above the 8). My charts are slightly different than the majority of forum users, but the scenario you described would have occurred at the close of my 5AM candle (translation entry = 9AM PST).

No news of importance today so trading will be dictated by the stock market and prevailing sentiment. Just wanted to say good job on describing your high probability entry and appologize if I sounded gruff in my original post. Really am trying to get people to think about the market and get them to plan their trades based on what they see and how they interpret the data, rather than focusing on consensus. Remember, a trader can go long while another goes short, and both can make pips. The difference is in trade management -- stop loss and take profit. Doesn't mean one trader is correct and one is wrong.

Hope this was somewhat useful.

Happy trading,
Pips

PS...Please do your backtesting! I'm a huge proponent of the task!! It will make you a stronger trader, it will help you see what works for you, it will help you see how many trades are triggered by the system, what your average gain is, your average loss, and your average hold time. Essentially, it will make you confident in forming your own analysis and entry and will help you become a self-sufficient trader. Once you master that, it will help you experience the "emotional-free" mindset we need to trade well.

Well first of all i want to say one thing, THANK YOU FOR HELPING ME... And then about AUDUSD pair, i took that trade and gathered in my basket of pips 39 pips IT WAS A HIGH PROBABILITY SIGNAL brought to us by MACD and others-) Once again i want to thank you for helping me! THANKS!
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