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4 Hour Strategy (MACD)

  • #7,441
  • Oct 14, 2007 9:26pm Oct 14, 2007 9:26pm
Quoting pips4uandme
What a great post! Love to see that you are taking the time to test!!!! Notice that you are finding GBP/USD really difficult to backtest -- which means you would find it really difficult to trade live right now. What you need to do is backtest exactly as you would trade live. This means draw your trendlines, support lines and any other tool(s) you use to trade live. Now, move forward 1 candle at a time. See where your entries would trigger -- write down your entry price, stop, and TP's, along with entry time. Next draw a horizontal line on your chart for your stop and one for your TP....keep going forward 1 candle at a time and manage your trade as if it were live. If your stop is hit, note -X pips or if your TP is hit +X along w/exit candle. Keep updating your chart as if you were sitting in front of it trading for the period of time.

Test at least 50 to 100 trades to start and get a feel for cable. Sometimes the candles are very large and the stops make certain trades unreasonable, sometimes you can plan to enter at a retrace of price -- test for yourself and see what you are comfortable and profitable with.

Great job again! Keep up the hard work necessary to become a profitable trader!!

Pips
Pips,

In backtesting, I also review the maximum drawdown and maximum run up as a percent of my stop and TP. This shows how valid and conservative a bid is. If I get 95% of the total run up, I am either really good, or am taking a big risk and should be locking in profits and moving stops in live trading. Same for draw downs, if price drops to 50% of my stop, that's a good thing, butif it is 90% of it, that is too close for comfort (andif it is over 100%, I lost the bet...greater than 200% and I need to rethink my stop logic).
Backtesting can be a detailed process, but at the end of the day, you will have huge amounts of data to mine and be able to gain insight to your trading method to see if it meets your trading style. I have backtested Phillip's 4hr and 5min methods on the Euro and am in process on the Loonie with favorable results.
Pip On!
Rick
  • #7,442
  • Oct 14, 2007 9:47pm Oct 14, 2007 9:47pm
First post ever- Read abput 50 % of the thread - still working my way through it. Looks very promissing ( Demotrading it at the moment) My question. What software do I need to be able to have access to the daily wrapup and other video posts- I am unable to open it with any of the programs I have.
Daniel
  • #7,443
  • Oct 14, 2007 10:49pm Oct 14, 2007 10:49pm
Quoting BAASDAAN
First post ever- Read abput 50 % of the thread - still working my way through it. Looks very promissing ( Demotrading it at the moment) My question. What software do I need to be able to have access to the daily wrapup and other video posts- I am unable to open it with any of the programs I have.
Daniel
First, all the lesson and the wrap up are compressed with ZIP, to decompress it you'll need a unzip program like. WINZIP or WIN-RAR

After the extraction, any of your music or movie player should be able to play the .mp3 file. ("Windows media player")
  • #7,444
  • Oct 15, 2007 12:38am Oct 15, 2007 12:38am
Quoting pips4uandme
What a great post! Love to see that you are taking the time to test!!!! Notice that you are finding GBP/USD really difficult to backtest -- which means you would find it really difficult to trade live right now. What you need to do is backtest exactly as you would trade live. This means draw your trendlines, support lines and any other tool(s) you use to trade live. Now, move forward 1 candle at a time. See where your entries would trigger -- write down your entry price, stop, and TP's, along with entry time. Next draw a horizontal line on your chart for your stop and one for your TP....keep going forward 1 candle at a time and manage your trade as if it were live. If your stop is hit, note -X pips or if your TP is hit +X along w/exit candle. Keep updating your chart as if you were sitting in front of it trading for the period of time.

Test at least 50 to 100 trades to start and get a feel for cable. Sometimes the candles are very large and the stops make certain trades unreasonable, sometimes you can plan to enter at a retrace of price -- test for yourself and see what you are comfortable and profitable with.

Great job again! Keep up the hard work necessary to become a profitable trader!!

Pips

Thanks for the encouragement Pips.

I did EUR/USD last weekend and backtesting the cable is so much scarier.
Yeah at first i did not put in the trendlines and s/r levels so it was pretty random.

Did about 5-6 months of backtesting and some findings were
1. if i keep my trade with the trade - usually will ride the gains much more (but takes about 1-2 weeks before it hits more manual trailling stop - which i usually adjust to the 21ema)

2. when the market is trending sideways, it keeps crossing the 89, and sticks to the 8 and 21 EMAs, must draw trendlines and determine the S&R levels.

3. it has quite shocking spikes and dips...although it tends to have faster dips. pretty scary

4. stoplosses are larger than EUR/USD. But many opportunities to enter via 1 hr with the TC pattern.


Overall was profitable but not 300+ pips per month. I'm still more comfortable with EUR/USD at the moment. well, more backtesting to do!

cheers,
mike
  • #7,445
  • Oct 15, 2007 12:43am Oct 15, 2007 12:43am
Quoting Palmer
The Cable can be a little wild...

On the website under the Tools link there are charts for the EURUSD for the 4hr and 1hr timeframe from the beginning of the year through the first week of October. It's a good exercise to print the charts out and look at the MACD formations and how price reacts to the moving averages. Yes, it's all after the fact but it's good to 'see' it....

Thanks Palmer,

I think the homework is great stuff. I'm planning to do the cable one for myself. Want to understand its movement and wildness...

cheers
  • #7,446
  • Edited 3:08am Oct 15, 2007 1:02am | Edited 3:08am
The cable seems to formed the 3 little sisters. Phil in the earlier post somewhere in pg 150-170 mentioned that when the 3 little sisters are formed, we should take the trade.

Is this a little too late for a long as there was already an upmove from the bottom channel?

MACD forming a higher low (like a TC) . Cable is also ranging between the 2 channels drawn since end of September. Since it's ranging, do we take the macd signal (coupled with the 3 sisters formation) for a long, as there is no direction (or specific market rhythm).

Edit: Went in at 2.0348 , now price about 2.0388, set SL back to BE. An hour after London open.
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  • #7,447
  • Oct 15, 2007 2:22am Oct 15, 2007 2:22am
Hi, everyone.

I have opened a deal on the E/U this morning, here are the details:

Signal BOZ 8:00 (GMT+3)
The price is above 89, so technically we are in an uptrend. It has bounced of 21, so with the rules of Market Rhythm.
I'm concerned about MA's 89, 21 and 8 - they are all close toghether and flat.
Enter 1.4176 SL 33+3+2=38 1.4137 (below 89) TP +60 1.4235 (the previuos high) b/e after 30 pips gain. R:R=OK

I'm always worry to take deals after weekend, don't know if the signal is reliable? Was I too early? if you have any comments - you are most welcome.
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  • #7,448
  • Oct 15, 2007 3:05am Oct 15, 2007 3:05am
Quoting ira
Hi, everyone.

I have opened a deal on the E/U this morning, here are the details:

Signal BOZ 8:00 (GMT+3)
The price is above 89, so technically we are in an uptrend. It has bounced of 21, so with the rules of Market Rhythm.
I'm concerned about MA's 89, 21 and 8 - they are all close toghether and flat.
Enter 1.4176 SL 33+3+2=38 1.4137 (below 89) TP +60 1.4235 (the previuos high) b/e after 30 pips gain. R:R=OK

I'm always worry to take deals after weekend, don't know if the signal is reliable? Was I too early? if you have any comments - you are most welcome.
Hi Ira,
I took it as well. I was in since thursday on that TC but price retraced back to 21. Realised it didn't close lower than the 21 and also above 89.
Well you're in about 50 pips in profit...congrats!
  • #7,449
  • Oct 15, 2007 4:37am Oct 15, 2007 4:37am
Quoting mikewong
Hi Ira,
I took it as well. I was in since thursday on that TC but price retraced back to 21. Realised it didn't close lower than the 21 and also above 89.
Well you're in about 50 pips in profit...congrats!
Thanks Mike, yes it went up nicely. It's interesting what caused this huge move, I don't see any news?
  • #7,450
  • Oct 15, 2007 5:19am Oct 15, 2007 5:19am
Quoting ira
Hi, everyone.

I have opened a deal on the E/U this morning, here are the details:

Signal BOZ 8:00 (GMT+3)
The price is above 89, so technically we are in an uptrend. It has bounced of 21, so with the rules of Market Rhythm.
I'm concerned about MA's 89, 21 and 8 - they are all close toghether and flat.
Enter 1.4176 SL 33+3+2=38 1.4137 (below 89) TP +60 1.4235 (the previuos high) b/e after 30 pips gain. R:R=OK

I'm always worry to take deals after weekend, don't know if the signal is reliable? Was I too early? if you have any comments - you are most welcome.
Hi Ira, That was a nice setup! Glad to see you made some nice pips this morning, and off to a good start of the week. I don't think you were too early at all. Actually, I think you utilized the early entry criteria very well. I can understand concern about the MA's flat, but the 21 was really supporting nicely. I didn't check the news, so I also not sure what caused the move........but

GOOD DEAL!

- "Stick to the plan"!

Ken
  • #7,451
  • Oct 15, 2007 5:37am Oct 15, 2007 5:37am
EurUsd.
08:00 Has given nice bounce off the 21. (TC was small but I was anticipating it to ove from 21. Two equal candles (twin towers) confirm move). I added to the portion I still had open with TP at 1.4275 Previous high. Will use manual trailing stop as to motion.
12:00. Still going according to plan. Stoploss set to 1.4175



GbpUsd.
08:00 Around 89. Bit difficult to determine direction. 04:00-08:00 candle indicate possible long wit inside greem candle. Look for entry on 1H above the 4H 21EMA if 1H moves.
12:00 Long entry on 1H was confirmed
  • #7,452
  • Oct 15, 2007 7:34am Oct 15, 2007 7:34am
I have been following this thread for about 2 days now. I have looked for the answer to this question but have been unable to find it. Although there were a few that touched on it, none asked this particular question. First of all I love the method! So far trading demo, I haven't lost any trades. But since I am unable to install the 365EMA, 200SMA, 89SMA, 21EMA and the 8 EMA, I have no clue where to exit these trades, other than using a moving stop. I use MT4. I was able to get the settings in the MACD, but I am unable (or maybe the word is inept) to figure out how to get these indicators installed properly. Can anyone help me with this particular problem?? How exactly to I get these indicators on my screen using Metatrader 4? Any help would be greatly appreciated. Thank you!
Rick
  • #7,453
  • Edited 8:19am Oct 15, 2007 8:11am | Edited 8:19am
Quoting Colostarr
I have been following this thread for about 2 days now. I have looked for the answer to this question but have been unable to find it. Although there were a few that touched on it, none asked this particular question. First of all I love the method! So far trading demo, I haven't lost any trades. But since I am unable to install the 365EMA, 200SMA, 89SMA, 21EMA and the 8 EMA, I have no clue where to exit these trades, other than using a moving stop. I use MT4. I was able to get the settings in the MACD, but I am unable (or maybe the word is inept) to figure out how to get these indicators installed properly. Can anyone help me with this particular problem?? How exactly to I get these indicators on my screen using Metatrader 4? Any help would be greatly appreciated. Thank you!
Rick
Hey Rick,

In MT4 main screen, look at top left corner where you have file, insert, view , tools etc.

Go to Insert (the tabs on the top menu of the prog) and click on indicators. Go to Trend and look for Moving Average.
You'll be prompted by a screen (pop up box) below and it will query you to fill in the fills like what sort of MA, (EMA? SMA? Weighted Avg etc) and also include the period like 89, 200, 365 , 21 and 8. It's all there. Another drag down box is for application to close, open , high low etc.

Please take a look at the screen shot below. Hope this helps.
Attached Image
  • #7,454
  • Oct 15, 2007 8:51am Oct 15, 2007 8:51am
Quoting Colostarr
I have been following this thread for about 2 days now. I have looked for the answer to this question but have been unable to find it. Although there were a few that touched on it, none asked this particular question. First of all I love the method! So far trading demo, I haven't lost any trades. But since I am unable to install the 365EMA, 200SMA, 89SMA, 21EMA and the 8 EMA, I have no clue where to exit these trades, other than using a moving stop. I use MT4. I was able to get the settings in the MACD, but I am unable (or maybe the word is inept) to figure out how to get these indicators installed properly. Can anyone help me with this particular problem?? How exactly to I get these indicators on my screen using Metatrader 4? Any help would be greatly appreciated. Thank you!
Rick
Hi Colostarr,
there is an indicator here:

http://www.forexfactory.com/showpost...postcount=7369

It draws all the "4h MACD Forex Strategy" *MAs + it show you the rhythm strength.

Here you can find a guide to import Indicators on metatrader:

http://www.fxtradeblog.com/metinfo.html
  • #7,455
  • Oct 15, 2007 9:34am Oct 15, 2007 9:34am
Hi everybody, ive been following this thread for a while. Im currently backtesting in a demo account. I have a question about metatrader 4, is there any way i can "rewind" the chart and then move forward one candle at the time by pressing a button?
  • #7,456
  • Oct 15, 2007 9:46am Oct 15, 2007 9:46am
Quoting ekling
Hi everybody, ive been following this thread for a while. Im currently backtesting in a demo account. I have a question about metatrader 4, is there any way i can "rewind" the chart and then move forward one candle at the time by pressing a button?
F12 should be the button you mean. (moving forward candle by candle)

janson
  • #7,457
  • Oct 15, 2007 10:15am Oct 15, 2007 10:15am
Allright thanks! But is there a way to "rewind"? I dont wanna see today or yesterdays candle, i wanna rewind lets say 2 weeks and THEN press F12 to make them appear one by one. Is that possible?
  • #7,458
  • Oct 15, 2007 11:15am Oct 15, 2007 11:15am
Hi,

I backtested may and june 2007, I would be glad to read some comments about this.

I have also a question about round tops / bottoms: must these patterns be exact or do you consider pattern I marked in the pdf also as round bottoms / tops.

br
panther_trader
Attached File(s)
File Type: pdf EUR_200705_06.pdf   67 KB | 833 downloads
  • #7,459
  • Oct 15, 2007 1:25pm Oct 15, 2007 1:25pm
Info
Attached File(s)
File Type: zip Daily Wrapup 15 Oct2007.zip   818 KB | 1,528 downloads
  • #7,460
  • Oct 15, 2007 2:06pm Oct 15, 2007 2:06pm
Quoting aboammar
Hi POCK

I see you have anice indicator which shows the time and nacd color at the top >> would you pls post over here so we can use it .. many thanks in advance

Ammar

hello
"shows the time and nacd color at the top "
this "Macd color at the top" is not a indicator
this only is the text... (in scren marks on in red)


but as you want I can add here
my tpl... and indicator )
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