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4 Hour Strategy (MACD)

  • #9,321
  • Dec 11, 2007 7:46am Dec 11, 2007 7:46am
Quoting HipsterPipster
I, personally, am almost convinced that the US gov. would prefer a devalued dollar. Debt burden on the populace is about imposible to pay at current value. Just another factor to consider.
I agree, govt. states a strong dollar policy, however, almost every action speaks otherwise (huge spending, huge debt, easy credit, lax lending standards, etc)

"Don't mind that man behind the curtain" (Wizzard of Oz)....
  • #9,322
  • Dec 11, 2007 7:58am Dec 11, 2007 7:58am
Quoting HipsterPipster
Sorry, having trouble with chart attachments
So, I post, and then don't follow through. HOpe someone is catching it. G/U
  • #9,323
  • Dec 11, 2007 8:19am Dec 11, 2007 8:19am
Quoting EricthePip
I agree, govt. states a strong dollar policy, however, almost every action speaks otherwise (huge spending, huge debt, easy credit, lax lending standards, etc)

"Don't mind that man behind the curtain" (Wizzard of Oz)....
US is an expansion country, we can't handle stagflation.
  • #9,324
  • Dec 11, 2007 9:03am Dec 11, 2007 9:03am
Hi everybody,

I have just made a decision, which is to trade disciplined.
I have started to trade the 4hmacd-system by end of August in a
disciplined manner , or I have tried ...
But lately I have been trading very intuitively. I have been mixing up
the system with other viewpoints and started experimenting.
I haven't drained my account by doing this, on the contrary,
but I get a much larger tolerance to losses than Phillip is teaching us.
I realize that I have to come back to 4hmacd to learn it by heart
and that I should not distract myself.

So, in addition to this decision I will post my trades on pdf,
which might be of help to one or the other.

Greetings
  • #9,325
  • Dec 11, 2007 9:26am Dec 11, 2007 9:26am
Quoting HipsterPipster
Looking for a RT for a short, off this support turned resistence area. Resistence area around 2.0450-2.0525.
As Posted earlier, working out verry nicely. I know that many of us do not trade in light of news, but I have found that very seldom is the market surprised. Good pipin.
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  • #9,326
  • Dec 11, 2007 9:27am Dec 11, 2007 9:27am
Quoting Golfer
Hi Delta

Just a piece of advice from personal experience. I also started looking at the MACD signals (try and identify the various signals) and then I start looking at the price actions/rules. I got totally confused and therefore I am still struggling with it.

Personally I think it's better to start looking at the price actions/rules and then look at the MACD to confirm the setups.

I don't know what the others experts will advise you to do but just my two cents.
Very good advice. Think as the market as a train (to Pipville, or worse anti-pipville, aka a loss). You board if and only if you have a good idea where it's going, and when. i.e. you wait for the market motion, train leaving the station, then you jump on, WITH MACD confirmation. Too many times we get on a train that's not moving and we go no where (like my Sunday night short, hey I wanted to trade and go to bed), and/or even worse loose pips b/c it went the wrong way....

When I read the successful trades, thay are typically jumping on a train that's moving as witnessed (i.e. tangible proof) by the motion of the market either 4hr completed bar and/or 1 hr motion, backed by the MACD signal...
  • #9,327
  • Dec 11, 2007 9:54am Dec 11, 2007 9:54am
Quoting EricthePip
Very good advice. Think as the market as a train (to Pipville, or worse anti-pipville, aka a loss). You board if and only if you have a good idea where it's going, and when. i.e. you wait for the market motion, train leaving the station, then you jump on, WITH MACD confirmation. Too many times we get on a train that's not moving and we go no where (like my Sunday night short, hey I wanted to trade and go to bed), and/or even worse loose pips b/c it went the wrong way....

When I read the successful trades, thay are typically jumping on a train that's moving as witnessed (i.e. tangible proof) by the motion of the market either 4hr completed bar and/or 1 hr motion, backed by the MACD signal...

Thanks for advices. Will have to learn when to jump into that right train. Hoping, exept Phills pdf's, to learn that with your help on the forum, looking for good occasions.
  • #9,328
  • Dec 11, 2007 9:59am Dec 11, 2007 9:59am
Quoting ashes
Hi everybody,

I have just made a decision, which is to trade disciplined.
I have started to trade the 4hmacd-system by end of August in a
disciplined manner , or I have tried ...
But lately I have been trading very intuitively. I have been mixing up
the system with other viewpoints and started experimenting.
I haven't drained my account by doing this, on the contrary,
but I get a much larger tolerance to losses than Phillip is teaching us.
I realize that I have to come back to 4hmacd to learn it by heart
and that I should not distract myself.

So, in addition to this decision I will post my trades on pdf,
which might be of help to one or the other.

Greetings

Don't worry everyone does this. As I said a while back trading is boring and with boredom comes change, with change comes loss, with loss comes excitement and not the good kind. You have to go back to being bored, want excitement? Jump out of a plane, goto a casino. The market is NOT the place for excitement.
Keep taking CT trades, I need more money
  • #9,329
  • Dec 11, 2007 9:59am Dec 11, 2007 9:59am
Hi all,

Interesting points about the Dollar outlook. Which would seem to justify the bias toward a rate cut. If rates drop though won't this provide an artificial prop to house values? I mean if mortgage repayment become cheaper for a while wont the "sub primers" be tempted into another unsustainable wave of borrowing, creating a bubble economy?

Thought anyone?
  • #9,330
  • Dec 11, 2007 10:40am Dec 11, 2007 10:40am
Quoting Ted1983
Hi all,

Interesting points about the Dollar outlook. Which would seem to justify the bias toward a rate cut. If rates drop though won't this provide an artificial prop to house values? I mean if mortgage repayment become cheaper for a while wont the "sub primers" be tempted into another unsustainable wave of borrowing, creating a bubble economy?

Thought anyone?
That would be true, but the LIBOR, which is the rate most adjustable interest rates and general mortgage rates are based on, hasn't responded to the cuts:

http://www.fxstreet.com/futures/fina...007-12-10.html

Also US housing unlikely to get a big boost even if the rates were coming down as 1) There's a glut of houses in most areas on the market and 2) prices are falling (most buyers happy to wait)

Rate cuts help primarily banks or people with credit card debt (assuming they are tied to the Prime rate, which can and usually does fall with the FMOC rate)

There is a government program between HUD and the US Treasury to "freeze" resets for certain borrowers.
  • #9,331
  • Dec 11, 2007 10:57am Dec 11, 2007 10:57am
Quoting Ted1983
Hi all,

Interesting points about the Dollar outlook. Which would seem to justify the bias toward a rate cut. If rates drop though won't this provide an artificial prop to house values? I mean if mortgage repayment become cheaper for a while wont the "sub primers" be tempted into another unsustainable wave of borrowing, creating a bubble economy?

Thought anyone?
I dont think the sub prime borrowers in the US will be getting loans quite as easily as they did in the past. The lenders are all clamping down and trying to get their houses in order (its their fault this started in the first place - they got greedy).

Best Regards,
Ah
  • #9,332
  • Dec 11, 2007 11:31am Dec 11, 2007 11:31am
Quoting HipsterPipster
As Posted earlier, working out verry nicely. I know that many of us do not trade in light of news, but I have found that very seldom is the market surprised. Good pipin.
Will be looking to long GU shortly
  • #9,333
  • Dec 11, 2007 11:38am Dec 11, 2007 11:38am
I was lucky. Had some time to monitor this trade more often during working hours. Resulting in more active management.
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  • #9,334
  • Dec 11, 2007 11:50am Dec 11, 2007 11:50am
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  • #9,335
  • Dec 11, 2007 11:56am Dec 11, 2007 11:56am
Quoting pips4uandme
Hi Phillip!

The move upwards last night has to do (imho) w/a couple of important factors not really related to the fed dec. tomorrow. The first piece of important info (euro) is that their economy isn't showing signs of weakness due to the currency rate. Essentially, we are still seeing signs of a strong economic cycle and the ECB is still spewing hawkish rhetoric. Last night, German data (specifically trade balance) supported the view that the ECB still has room to increase rates in the Jan. 08 meeting (this is partly why we have been seeing a bit of non-correlated movements lately w/cable, I think). Also, the equity markets have been rebounding and the carry is back in favour. Since E/J is extremely popular, it's rise as also boosted E/U. (We may see a fall w/a disruption in the Dow depending on Fed actions -- even if it supports a rise in E/U, and heavy drop in E/J will most likely bring Fiber down too.

Last night's Cable Rise was expected fundamentally too. Reason #1 has to do with the stronger inflation figures. The BoE (and the ECB) have strong mandates to control inflation -- it is their number 1 priority. Because the inflation figures were higher than expected, it put the prospect of further rate cuts by the BoE in question. (most likely, the UK will have to cut rates again, but this fickle market has decided temporarily that a hold is more likely). The Carry equation also plays a decisive role in helping boost Cable too.

Lastly, Friday's Job report really raised the question of what is going on in the US economy. It paints a rosy picture (just shy of expansion) and many market participants are most likely questioning the actions of the Fed. If the numbers are as robust as they printed, then the US is most likely not going into recession -- and this would mean that the Fed will most likely NOT cut .50 bp (no recession is US positive, but it will drive up the price of oil, which devalues US dollar -- which accounts for a small increase in Cable and Euro due to Dollar Index). However, there is little doubt that the Fed will cut rates by .25 bp to keep the equity markets afloat and continue to provide liquidity to credit squeezed markets. This part is the hardest because we've had the "mortgage solution" (which really looks like funneling refis to specific lenders under the guise of "renogotiation"-- but that is a whole other issue -- and no matter how I feel about it -- it does alleviate some of the perceptions of market collapse for a little while and will put money back into the system and provide an avenue to support housing market for a while). Back to the NFP -- the NFP gave confidence to the U.S. equity markets and has boosted the closings -- again good for carry and GBP & EUR positive. Then we have the stronger UK inflation numbers -- suggestive of no cut in Jan -- again UK positive. Then to the Fed -- still a cut (US negative ) -- but how much of a cut? You would think that taking the quarter point off the table by 50% would have strengthened the dollar, but it has done just the opposite -- why??? The only thing I can think of is that the market is actually AFRAID OF A 50 BP CUT & what that means. If the Fed cuts 50% I think we will see fireworks!! My guess is the equity markets may respond illogically, and sell off, thinking the Fed is giving the heads up to more trouble on the horizon that hasn't come to light yet. Instinctively, we think this would lead to a rise in E/U & G/U -- but I think it may actually (and indirectly) strengthen the dollar via carry trade sell off.

This is more info than you asked for, I think -- so sorry for that. Hope you find some of my ideas useful and we shall see how this game plays out tomorrow. Fascinating stuff!

Careful trading to all!
Pips

Thanks. I knew you will have a much better answer than me. I am not a fundamental. I am a draughtsman so I like graphs and pictures more than economics.
  • #9,336
  • Dec 11, 2007 1:28pm Dec 11, 2007 1:28pm
Quoting HipsterPipster
As Posted earlier, working out verry nicely. I know that many of us do not trade in light of news, but I have found that very seldom is the market surprised. Good pipin.
I am calling the GU trade a RT with a hickhup.
  • #9,337
  • Dec 11, 2007 1:40pm Dec 11, 2007 1:40pm
Quoting EricthePip
That would be true, but the LIBOR, which is the rate most adjustable interest rates and general mortgage rates are based on, hasn't responded to the cuts:

http://www.fxstreet.com/futures/fina...007-12-10.html

Also US housing unlikely to get a big boost even if the rates were coming down as 1) There's a glut of houses in most areas on the market and 2) prices are falling (most buyers happy to wait)

Rate cuts help primarily banks or people with credit card debt (assuming they are tied to the Prime rate, which can and usually does fall with the FMOC rate)

There is a government program between HUD and the US Treasury to "freeze" resets for certain borrowers.

Hi everyone! Thank you so much for your opinions on fundies!! Really interesting stuff (OK, at least to a currency nerd like me...my friends and family can't stand hearing this stuff, and I'm no longer allowed to talk about it at dinner parties, unless I give specific ways for people to make money on it (LOL! that's the hard part!!). With all that said, I promise this will be my last fundie post here for a while. (I didn't go read the article yet, but I will after this...hopefully I'm not being redundant).

The Libor is interesting (and it is interesting to look at the TED spread too)...I own a small mortgage brokerage here in California, and yes, you are absolutely 100% correct that almost all the loans written over the last 4 years have been tied to LIBOR -- and LIBOR reflects the willingness of banks to lend to one another. The lack of response to the Fed cuts in the LIBOR shows the continuation of the credit crunch in the market -- when institutions won't lend to each other, you bet they don't really want to lend to the consumer. What is interesting though, is that 2 months ago it was impossible to find a product to refi consumer's into. The lending criteria was so stringent that unless you were conforming loan w/equity you could not get a loan. This environment has def. changed! The cuts are filtering into the secondary market and mortgages are actually very well priced at this time. Consumers do have the ability to flip into very stable low interest rate mortgages provided they meet the Debt to Income ratio's (this can be a challenge). Newer loan products that should be looked at by the consumer should not be tied to LIBOR (and neg. am's should be avoided as well). This brings up the whole "bail-out." I absolutely disagree that the government is bailing out the consumer who took out "bad" loans from "greedy" investors. From what I can see at the moment, most of this program is rhetoric and designed to "flip" old loans into new ones. These clients are actually getting funneled directly to the "big" banks (B of A, Countrywide, etc.) under the pretense of "freezing" rates. Details haven't been disclosed, but I am seeing a lot of marketing coming from "renogotiation" teams -- who are really only loan agents. The "Freeze" will most likely apply to people w/ARM margins in the 6 point range and credit scores of 650 or less (this may actually be a bailout). The liquidity is being re-pumped into the market by the consumer b/c they are inadvertently refing their mortgages while thinking they are "freezing," -- the rates being quoted are actually above par market rates (translation: The originator is getting backpoints on the loan -- and this is OK, because it covers transaction costs -- it costs a lot of money to cultivate business via marketing campaigns). The rate cuts filter down to the consumer, exactly as Eric stated. & it also creates cheap money (provided lenders will lend). BUT, it is filtering into the mortgage market too b/c it is directly influencing the 10 year bond market! The 10 year treasury is where 30 year mortgage pricing comes from!! What does all this mean? It means that the Fed is only creating the illusion of liquidity to prop the market until confidence returns. We are def. not out of the woods -- but a full-fledged disaster has temporarily been put off (and maybe avoided). (Also, the Hud program hasn't been worked out -- we are waiting for the Senate to approve -- but we are way overdue for HUD to modernize! Push for better disclosure laws -- that is what will protect the consumer from slimy direct lenders who currently do not have to disclose their backpoints -- only brokers have to do that.).

Hmmmm....Guess you guys won't be inviting me to any parties either, eh?:

OK....back to how we make money....it's from the charts!!!

Best,
Pips
  • #9,338
  • Dec 11, 2007 1:44pm Dec 11, 2007 1:44pm
Quoting Phillip Nel
Thanks. I knew you will have a much better answer than me. I am not a fundamental. I am a draughtsman so I like graphs and pictures more than economics.
Hiya!

You are very welcome!! Ahhhh...& now I know why you have the uncanny ability to SEE the emotion in the charts!! You have the technical eye...& this is how we truly make money in the market...

Thank you again for helping all of us develop a way to visually see what the market is doing and figuring out a way to profit from it w/out risking too much! You, my friend, are truly an awesome inspiration to people like me!!

Happiness Always,
Pips
  • #9,339
  • Dec 11, 2007 1:53pm Dec 11, 2007 1:53pm
Right now I am looking at the USD/CHF on the 4 hour. It found support on a trendline and the MACD shows a round top. It also has a few nice tails. Right now I am waiting for it to close below the 200 and 21.

Is my analysis correct?
  • #9,340
  • Dec 11, 2007 1:56pm Dec 11, 2007 1:56pm
My screen shot
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