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4 Hour Strategy (MACD)

  • #8,321
  • Nov 8, 2007 10:06pm Nov 8, 2007 10:06pm
Quoting pips4uandme
Hi Ryanmcd,

I deleted my post re: studying the market vs. developing bad trades. I was mistaken in my assumption that it was education of market movements rather than bad habit development.

To the Forum:

Don't look for a trade everyday. Watch and study, but be patient for the good setups -- they come frequently enough. Use down time to backtest, look at charts and study technique. If your "addicted" to trading -- invest in forex tester and do simulated trades (and see how good you are at recognizing setups in a "live" trading environment.

To unlv_tj:

Don't set up your first account with all your total trading money! This is suicide, as you will be tempted to let bad trades "ride" b/c the money is in the account or to overtrade. You most likely won't make the wisest decisons either in the beginning. Take $1000.00 and trade micromini's at Oanda -- put the remainder in an interest bearing account somewhere until you are ready to up the ante. This is your first live account and real money that you worked hard for is at stake. Believe me when I say, You will want as much money as possible later on when you have the skills to be consistently profitable. Also -- for some odd reason, demo accounts execute much better than live acccounts -- and you will most likely need time to acclimate (sp?) to the nuances. After you are super skilled, I wouldn't worry about $5K w/Oanda -- wouldn't worry about $200K either -- they are well capitalized.

Best to all,
Pips

Hey Hipster -- Have the greatest time ever on the S.A. bus ride!! I'm super jealous -- Are you going to Peru??? Really Really Jealous!!
Hi Pips

Just to confirm on what you are saying. I've been trading the five-minute system for nine months now - Still trading micro (0.01) and mini (0.1) lots in a $500 mini account. You don't really need more than that if you are a part time trader. I am getting much better now handling my emotions during the trades.

I am doing the very same with the 4h MACD system now as from last month - 3 trades so far 2 positive and 1 negative (that China morning). I would also like to advice people to trade small (micro) lots until they feel comfortable with the system - consistently making profits. It took me 8 months to do that in Phillip's 5minute system (with lots of support from Phillip) . I am sure it will take me much longer getting use to this system.
Willem Forex recipe for success = Patience, discipline & hard work.
  • #8,322
  • Nov 8, 2007 11:17pm Nov 8, 2007 11:17pm
Quoting Golfer
Hi Pips

Just to confirm on what you are saying. I've been trading the five-minute system for nine months now - Still trading micro (0.01) and mini (0.1) lots in a $500 mini account. You don't really need more than that if you are a part time trader. I am getting much better now handling my emotions during the trades.

I am doing the very same with the 4h MACD system now as from last month - 3 trades so far 2 positive and 1 negative (that China morning). I would also like to advice people to trade small (micro) lots until they feel comfortable with the system - consistently making profits. It took me 8 months to do that in Phillip's 5minute system (with lots of support from Phillip) . I am sure it will take me much longer getting use to this system.
Hi Golfer!

Bet you are consistently profitable w/the 4 hour much sooner than you think b/c you have already mastered discipline and TA skills through your last 8 months of study/trading! Great Job!!! (& that china morning (evening for me) was evil b/c it did look like a short was in the cards before that announcement -- and the retrace often happens during Asia -- thank goodness for stop, ya? 2/3 is super great!! May your pips multiply and prosper!

Best,
Pips
  • #8,323
  • Edited 12:48am Nov 9, 2007 12:45am | Edited 12:48am
First, HipsterPipster - very good posts, thanks.
I completely agree with developing bad habbits on demo or paper, I think SL taken on demo hurts too, and when there are many of them it can kill your trading. It's like a snowball, you think you are learning by picking many trades but in the long run you end with bunch of losses and you don't know where you have been wrong. The real focus should be on patience and discipline, no matter what it is - live account, paper or demo. If you are disciplined on demo you will be discipline on real account and vise versa. So it's very important to have the right focus from the beginning.
As for the SL, again you are absolutely right, the trade must breath! SL must be put in place where you know excactly that this is it, you have been wrong.
My trading was very poor untill I have learned to be patient and to put SL in a right place. Looking back I can also add that I had a real breakout in my trading when I realized that I don't know the rules of the system. I mean I knew a lot, but then I decided to write the rules down, make it simple and follow them. When there are rules on paper like 1, 2 you know excactly when to pull the trigger and when to stay out. You also know if you weren't discipilined and you violated your rules.
Emotion is also a very important thing! Pips once told me that while trading you must have the same mindset as when you are doing backtesting and don't risk more than you are OK with giving up.

OK and some final thoughts on E/U. In the past I would most definitly loose money in the situation like this. Because I would not take TC as the price is at it's high and nobody knows how far it would go - scared. And I would take counter trend trades.
It's good that I am much wiser now and don't take counter trend trades, there are still no signs of weakening. But I'm still not taking TC - scared . So, I'm on the sidelines, practising patience. Hope one day will be able to take these TC. Good work for those who have taken them!
  • #8,324
  • Nov 9, 2007 1:09am Nov 9, 2007 1:09am
Quoting Phillip Nel
That is a human problem in the beginning. To combat that one must first ask some questions about the graph in front of you and then setup a plan.

1. Are we in an up or down trend(if it cant be established then it is uncertain and risky trading)----UsdCad are in a strong downtrend
2. Where are the price to the MA's---It closed above the 21
3. Is there a rule that can be applied here--- Close above 21, pullback and possibly going to 89
4. When will I enter--- TC off 8/21 in the direction of 89
5. Where will I be wrong in this trade----Establish a stoploss at least below 8ema and or closeby candle low
6. Where do I expect to take profit-----Establish TP targets
7. When will I go breakeven---established according to market volitality in last few candles. If last 3 candles were 30 pips you wont set BE after 15pips
8. When will I close the trade before it reached my stoploss----according to news and candle patterns
Hey Phil,

thank you for this post really one of the best and very helpful one. For UCAD to me that is an excelent filter when to stay out and wait for a better price action. My biggest problem is to filter a trade when it looks manageable on the surface.

One step closer.

Robert
Enter Signature
  • #8,325
  • Nov 9, 2007 1:41am Nov 9, 2007 1:41am
This system is a lot interesting is to me appeals to a lot. Now I wanted to ask an aid to you, why there are some things that me are not much clear.
As an example: IN ORDER TO MAKE A TRADE I WATCH:
1) The main trend, therefore UP or DOWN and I draw supports \ resistances \ trendlines.
2)I attend it marks given them from the MACD, with confirmation the some patterns of the candles.
3)IF the trade is against trend can take profit or on the 8EMA or the 21EMA or also on the 89EMA.
IS here that I have some problem. The 8 EMA is practically always caught up like objective, but like I make to establish if the price can catch up also the 21ema or quite the 89EMA?
Thanks to all and sorry me for my english. THANSK TO ALL
  • #8,326
  • Nov 9, 2007 2:58am Nov 9, 2007 2:58am
Quoting pips4uandme
Hey Hipster -- Have the greatest time ever on the S.A. bus ride!! I'm super jealous -- Are you going to Peru??? Really Really Jealous!!
I am off, now, heading from Santiago, Chile, where I am living, east up through the Andes and across Argentina to Paraguay. I then will be visiting friends and doing some work on the Paraguay and Brazilian border. Some day I will be visiting Peru, and of course southern Chile/Argentina, gotta see Patagonia, you know do some trout fishing in the glacier rivers flowing down off the Andes, ok I'll stop. IRA, your welcome, "psychology and emotion" are more important than we realize.
Ok, gotta catch that bus ride, great pipin to you all. Chau, Dion
  • #8,327
  • Nov 9, 2007 3:23am Nov 9, 2007 3:23am
Quoting AlbyM
This system is a lot interesting is to me appeals to a lot. Now I wanted to ask an aid to you, why there are some things that me are not much clear.
As an example: IN ORDER TO MAKE A TRADE I WATCH:
1) The main trend, therefore UP or DOWN and I draw supports \ resistances \ trendlines.
2)I attend it marks given them from the MACD, with confirmation the some patterns of the candles.
3)IF the trade is against trend can take profit or on the 8EMA or the 21EMA or also on the 89EMA.
IS here that I have some problem. The 8 EMA is practically always caught up like objective, but like I make to establish if the price can catch up also the 21ema or quite the 89EMA?
Thanks to all and sorry me for my english. THANSK TO ALL
Hi Alby,

the first you must consider is that a countertrend trade is always riskier than to trade with the trend. So your main objective is to protect your capital by moving the sl. to be. as soon as possible.

When considering an RT or an RB you take the speed of the market into account. Does the price come back to the 21 or just to the 8 MA? In case of the latter countertrend trade is not a high probability one, wait for the pullback and for the bounce. If it comes back to the 21 how far is it from the current price? Does it give you a good r:r? Consider that the price may not reach the 21 actually, so the TP should be between the 8 and the 21.
Lokk at the MACD. Does it give you a nice RT or RB formed in 3-4 candles? These are the more reliable ones.
Look at the candlestick patterns. Does the signal candle forming a reversal signal like a shooting star or a hanging man etc? (my favorite is a pin bar, with a good MACD they are quite reliable)
As for the travel to the 89 it is a bit more complicated to see. The rule says: When the price breaks through the 21 it tends to come back and then go to the 89. So at the beginning of a consolidation period you cannot say that how far it will go (you anticipate mainly the 8 or the 21 and watch there eagerly). I personally watch the price interacting with the 21, and if it breaks through - comes back to it and make a bounce then I consider a travel down/up to the 89.

Hope this helps.

Robert
Enter Signature
  • #8,328
  • Edited 3:38am Nov 9, 2007 3:36am | Edited 3:38am
Quoting AlbyM
This system is a lot interesting is to me appeals to a lot. Now I wanted to ask an aid to you, why there are some things that me are not much clear.
As an example: IN ORDER TO MAKE A TRADE I WATCH:
1) The main trend, therefore UP or DOWN and I draw supports \ resistances \ trendlines.
2)I attend it marks given them from the MACD, with confirmation the some patterns of the candles.
3)IF the trade is against trend can take profit or on the 8EMA or the 21EMA or also on the 89EMA.
IS here that I have some problem. The 8 EMA is practically always caught up like objective, but like I make to establish if the price can catch up also the 21ema or quite the 89EMA?
Thanks to all and sorry me for my english. THANSK TO ALL
Hi, if I understood you correctly your question was about 8MA in a counter trend trade. In a counter trend trade your real target is 21MA, but you must closely watch how the price behaves around 8MA. 8MA can be your first profit target, you might want to close some position there, or you can move your position to breakeven at this point. If the price hits 21, again you may still leave some of your position open in case the price goes to the 89MA. But if you closed all your position at the 21, then wait for the price close below/above 21, wait for retracement to the 21 and then with the MACD signal you can take the deal to the 89MA.
Don't forget to analize market rhythm before taking any of MACD signals.
Anyone is welcome to cerrect me.

PS I see Robertus has given already a good answer to you.
  • #8,329
  • Nov 9, 2007 3:53am Nov 9, 2007 3:53am
hi all

im trying to look for a good system to use in the eur/gbp, any suggestions please?

thanks to all
  • #8,330
  • Nov 9, 2007 4:23am Nov 9, 2007 4:23am
Thanks so much, Robertus and ira, now is + clear ..

Now i try at write a document with the fundamental rules to hold like memorandum.

Thanks for the availability!
  • #8,331
  • Nov 9, 2007 4:45am Nov 9, 2007 4:45am
Both EurUsd are giving short signal but there is a lot of uncertainty. I will wait at this stage
  • #8,332
  • Nov 9, 2007 4:47am Nov 9, 2007 4:47am
Quoting pips4uandme
Hi Ryanmcd,

I deleted my post re: studying the market vs. developing bad trades. I was mistaken in my assumption that it was education of market movements rather than bad habit development.

To the Forum:

Don't look for a trade everyday. Watch and study, but be patient for the good setups -- they come frequently enough. Use down time to backtest, look at charts and study technique. If your "addicted" to trading -- invest in forex tester and do simulated trades (and see how good you are at recognizing setups in a "live" trading environment.

To unlv_tj:

Don't set up your first account with all your total trading money! This is suicide, as you will be tempted to let bad trades "ride" b/c the money is in the account or to overtrade. You most likely won't make the wisest decisons either in the beginning. Take $1000.00 and trade micromini's at Oanda -- put the remainder in an interest bearing account somewhere until you are ready to up the ante. This is your first live account and real money that you worked hard for is at stake. Believe me when I say, You will want as much money as possible later on when you have the skills to be consistently profitable. Also -- for some odd reason, demo accounts execute much better than live acccounts -- and you will most likely need time to acclimate (sp?) to the nuances. After you are super skilled, I wouldn't worry about $5K w/Oanda -- wouldn't worry about $200K either -- they are well capitalized.

Best to all,
Pips

Hey Hipster -- Have the greatest time ever on the S.A. bus ride!! I'm super jealous -- Are you going to Peru??? Really Really Jealous!!

Great post pips, the only thing different when trading .01 vs 100 is the numbers. If you start trading heavy and lose it's prob emotion. It took years to get over the $$$ game, now if I make or lose 10-50k in a day you would never know it, I do not get excited and I do not brag to anyone. When you lose the excitement of tradeing then you have made it. Yes I still like to win but it does not change my mood.
Keep taking CT trades, I need more money
  • #8,333
  • Nov 9, 2007 4:49am Nov 9, 2007 4:49am
Quoting adrianebn
hi all

im trying to look for a good system to use in the eur/gbp, any suggestions please?

thanks to all
How about this one right here???
  • #8,334
  • Nov 9, 2007 5:03am Nov 9, 2007 5:03am
isnt this only used for eur/usd and cable?

Quoting Palmer
How about this one right here???
  • #8,335
  • Nov 9, 2007 5:17am Nov 9, 2007 5:17am
Quoting adrianebn
isnt this only used for eur/usd and cable?
We are mainly focused on E/U, G/U and U/J, but it can be applied to any pair.
  • #8,336
  • Nov 9, 2007 5:25am Nov 9, 2007 5:25am
Quoting adrianebn
isnt this only used for eur/usd and cable?

There are many people who trade several different currencies here. We all have our favorites. If you go to the website, under the Tools link, there are two .pdf files of charts for the EURUSD for the 4hr and 1h4 charts. You can print these out and make notes on them to see how things 'work'. Also, there is a Period Separator indicator on the page to download. This draws a vertical line from the hour of your choosing, usually the Sunday open for most people, to be used as a reference point for the week. You can add this to the pair you are watching and print those charts out as well to see how that pair looks with the method...
  • #8,337
  • Nov 9, 2007 5:29am Nov 9, 2007 5:29am
i will try back test it, thanks for your help.

Eur/Usd seems very uncertain right now, any reason one knows?


Quoting ira
We are mainly focused on E/U, G/U and U/J, but it can be applied to any pair.
  • #8,338
  • Nov 9, 2007 6:15am Nov 9, 2007 6:15am
  •  shauny
  • | Joined Jul 2007 | Status: Still learning and never gonna stop | 127 Posts
Hey guys!! I'm sending my greetings from GREECE!! I am here for holidays, but I brought my laptop along to check mails, FF and of cos my passion Forex Trading!! Took a long flight of 11hrs from singapore to greece, was pretty shag after the flight but my passion and enthusiasm kept me going to check what is the market doing today, so I can update myself and know what's going on!! My hotel actually provides free wireless!! Thank god!!

I can see many new guys around learning about this system and I can see great improvement of some of them who can planned their trades better and even asked for advices when they don't know. Well done guys. You guys are picking up a great system!!

I will be starting my tour tomorrow and should be visiting places like temple of zeus, museum and such. Any greeks here can shed some light on places to go or shop?? lol..

Anyway, this is my take on EU and GU.

GU has broke thru 21ema, but its not confirmed yet that it wil continued its break and head down to the 89sma, there is still lots of indecision at this time from the price action. It might hit 21ema and move away to continue its uptrend. It has been trending so strongly and made new highs each time.

EU currently at 8ema, which has shown great support. It might move away and continue its uptrend.

In conclusion, till then the market show its cards, we sit tight and wait for it to happened. Not to forget today is a friday and the last day of the week. If you are going to made a trade, its up to individual if you want to hold the trade over the weekend or closed when the market ended. I wil wait and react according to whatever it comes to me.. Cheers!!
  • #8,339
  • Nov 9, 2007 6:25am Nov 9, 2007 6:25am
Quoting JimDandy
I must be missing something......PHillip said..........
4. When will I enter--- TC off 8/21 in the direction of 89
How is this trade a TC? It bounced off my trendline.....I have little faith in it going up......but the rythym will sort it out!

That is where I would have made 2 trades both with pips in the bag. Both TC trades according to the rule that the price might be on its way to the 89 so I was only looking for long trades.
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  • #8,340
  • Nov 9, 2007 6:57am Nov 9, 2007 6:57am
Since H4 and H1 EU timeframes doesn't suggest any clear rhythm, I switched to 30min TF. I think it shows a good rhythm and where the price is finding support (sma89).
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