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4 Hour Strategy (MACD)

  • #9,901
  • Edited 11:13am Jan 1, 2008 9:28am | Edited 11:13am
ChesterB,

I am a FOREX newbie and have been trying to absorb as much information as possible in the last two months (yeah....there are about 2.1 billion posts with this same introduction out there .

Were you describing a trailing stop loss in your previous post? How would you change your stop losses and second tier TPs after the first TP was hit? Automatically or manually? I have looked at Ninja Trader as a possible platform to use to do just that. I believe the software supports exactly what you want to do automatically. I have a full time job, so I can't sit around watching the FOREX market all day and place trades. What platform do you use? Ninja Trader isn't free....

Thanks in advance.

-Erik
  • #9,902
  • Jan 1, 2008 1:00pm Jan 1, 2008 1:00pm
Yes i was talking about a trailing stop, which would be
done manually
  • #9,903
  • Jan 1, 2008 1:39pm Jan 1, 2008 1:39pm
So the New Year has come all around the world and it's time to go back to work . Not sure if we should give some time for the market to settle down, but I will wait for the market to show its hand.

Phillip, if you don't mind I have some questions that really bother me. Can you, please, explain in detail how you calculate your R:R? I know that if your TP is 15 and SL is 25 R:R is not good, it should be at least equal and the more the better, but how do you come to the figures like 1:1,74?
And in this sence I have one more question. You open two lots, and you know that you will close 1 at +25. And your SL on both lots will be +37 +37, so total +74. And your second TP will be +40, so total profit will be +65 on two lots, which makes R:R bad, am I right? Will you take the deal in this case, or will you take the trade only in case if your second TP will be more than 50?
Hope I was not too confusing, in fact I want to know how you calculate your R:R on two lots, when you know that the second you will close at +25.
  • #9,904
  • Edited 3:11pm Jan 1, 2008 2:34pm | Edited 3:11pm
Quoting ira
So the New Year has come all around the world and it's time to go back to work . Not sure if we should give some time for the market to settle down, but I will wait for the market to show its hand.

Phillip, if you don't mind I have some questions that really bother me. Can you, please, explain in detail how you calculate your R:R? I know that if your TP is 15 and SL is 25 R:R is not good, it should be at least equal and the more the better, but how do you come to the figures like 1:1,74?
And in this sence I have one more question. You open two lots, and you know that you will close 1 at +25. And your SL on both lots will be +37 +37, so total +74. And your second TP will be +40, so total profit will be +65 on two lots, which makes R:R bad, am I right? Will you take the deal in this case, or will you take the trade only in case if your second TP will be more than 50?
Hope I was not too confusing, in fact I want to know how you calculate your R:R on two lots, when you know that the second you will close at +25.
Ira, I'm going to take a stab at this, and Phillip or anyone else can correct me if I'm wrong or unclear. Phillip counts his combined entries as one trade, when he calculates his R:R. In your second example, the stop loss on both lots is 37. Therefore, the number of pips both lots must go to be stopped out is also 37. So, the risk is 37 pips. The reward is 25 pips on one lot and 40 on the other, so the figure is calculated by adding the two = 65 and, then, getting the average = 32.5 pips. The risk/reward is then figured as possible loss of 37 pips vs. gain of 32.5. Divide both figures by 37, and you get an R:R of 1:0.88, bad R:R. If I understand this correctly, you are calculating your R:R not in terms of how much money or pips you can make, but in terms of how many pips your trade is likely to move in your favor or against you. You are looking at the possibilities of your trade and not at the possibilities of your gain or loss.

I just realized I ignored at least part of the question, where you said that he knows he will close one lot at +25. I'm not sure, but I'm wondering if we don't sometimes confuse Phillip's first profit targets with the fact that he says he will never let a twenty or thirty pip gain turn into a loss. When he has to leave his trade, I'm guessing he usually sets his first profit in the region of twenty to thirty pips, but I assume he has also, in that case, figured his R:R to be around 1:1 or better, or moved his stop to make it so, or set the trailing stop to make it so. And now that I've blabbed on and on, Phillip can answer you, and tell you the truth. --The best to you, Ira!
  • #9,905
  • Jan 1, 2008 2:48pm Jan 1, 2008 2:48pm
Phillip Nel- One Hour Strategy. This copy is from page 92, post 1372. Look there for the original mp3 and the PDF charts. The mp3 and charts were also reposted on page386, post 5789. For those with difficulty understanding spoken English.
Attached File(s)
File Type: doc PhillipNel 1Hr Strategy written copy.doc   8 KB | 782 downloads
  • #9,906
  • Jan 1, 2008 3:36pm Jan 1, 2008 3:36pm
question for anyone on the 4hr system, when we already are crossing
over the SMAs/EMAs, what then is the main profit target?
  • #9,907
  • Jan 1, 2008 5:10pm Jan 1, 2008 5:10pm
I have unsuccessfully researched a reputable broker with a good trading platform to use with this 4 HR MACD strategy. I would prefer a platform that supports charts natively and possibly trailing stop losses. Also, I don't have any interest in trading based on news.

Right now I am demo'ing MT4 through Interbank FX, but I have heard very negative things about Interbank and MT4 brokers in general. I would prefer a broker based in the US just for a feeling of security since I live in Virginia. The feeling of wiring $5-10k overseas makes me uneasy.

Does anyone have any GOOD suggestions? I do realize this may not be the correct thread to post this in....
  • #9,908
  • Jan 1, 2008 8:01pm Jan 1, 2008 8:01pm
yes, I think it might be a good idea to post about that in broker's forum! This thread is long enough lol
  • #9,909
  • Jan 2, 2008 12:18am Jan 2, 2008 12:18am
Quoting OldDog
Ira, I'm going to take a stab at this, and Phillip or anyone else can correct me if I'm wrong or unclear. Phillip counts his combined entries as one trade, when he calculates his R:R. In your second example, the stop loss on both lots is 37. Therefore, the number of pips both lots must go to be stopped out is also 37. So, the risk is 37 pips. The reward is 25 pips on one lot and 40 on the other, so the figure is calculated by adding the two = 65 and, then, getting the average = 32.5 pips. The risk/reward is then figured as possible loss of 37 pips vs. gain of 32.5. Divide both figures by 37, and you get an R:R of 1:0.88, bad R:R. If I understand this correctly, you are calculating your R:R not in terms of how much money or pips you can make, but in terms of how many pips your trade is likely to move in your favor or against you. You are looking at the possibilities of your trade and not at the possibilities of your gain or loss.

I just realized I ignored at least part of the question, where you said that he knows he will close one lot at +25. I'm not sure, but I'm wondering if we don't sometimes confuse Phillip's first profit targets with the fact that he says he will never let a twenty or thirty pip gain turn into a loss. When he has to leave his trade, I'm guessing he usually sets his first profit in the region of twenty to thirty pips, but I assume he has also, in that case, figured his R:R to be around 1:1 or better, or moved his stop to make it so, or set the trailing stop to make it so. And now that I've blabbed on and on, Phillip can answer you, and tell you the truth. --The best to you, Ira!
Thanks OldDog, that makes sense, I was calculating my R:R in the wrong way I think. I would also like Phillip to comment, if it's possible.
  • #9,910
  • Jan 2, 2008 12:42am Jan 2, 2008 12:42am
Quoting ChesterB
question for anyone on the 4hr system, when we already are crossing
over the SMAs/EMAs, what then is the main profit target?
You mean when there is no next MA, like now on EUR? In this case you may use as your profit target recent high, trend line, round price levels.
  • #9,911
  • Jan 2, 2008 2:35am Jan 2, 2008 2:35am
http://www.fxpalace.com/ is one one the best forex sites i have found for beginners. It has everything you need ery well documented and explained.
  • #9,912
  • Jan 2, 2008 3:05am Jan 2, 2008 3:05am
Quoting burbanski
First, thank you Phillip. You've been incredably generous to this community. And thanks to all the others that have followed in Phillip's foot steps.

I recently became a student of this strategy. I've read the strategy guide and 13 lessons. I've begun reading through the thread, but I'm only on page 21 of 657, so I have a long ways to go.

I have also started to backtest the strategy beginning with January and February of 2007. When backtesting, I use the visual testing mode with an empty EA in MetaTrader to give me the most real backtesting experience that I can. I plan to start demo trading the strategy soon (while at the same time completing my backtesting throuh 2007).

I've attached my initial backtesting results. I'd really appreciate it if experienced followers of this strategy would take a quick look and let me know what I'm doing right and wrong. I have my own ideas, and some of them are called out in my backtesting results, but I sure would appreciate validation and additional comments.

In short, after two months, I'm a bit in the hole. I think I did OK during January (which I believe was described by others as a difficult month for this strategy), but I started to slide downhill quickly in February.

At the very least, maybe this attachment will help others understand how another newbee has first approached this strategy.

Hi,
Had a quick look at your analysis you have done. Your charts made it easy for me to understand your approach.


Let me just remind you of the formula for the 4hour MACD strategy.

  1. MACD – is there any familiar signals about to form? (RT, RB, TC etc.)
  2. Rhythm – how does the MACD signal fit into the rhythm of your chosen currency pair? For example:

    1. in trending market price pulls back towards the 21 and then continues in the direction of the trend
    2. in the rangebound market price plays „ping pong”
    3. if you cannot determine the rhythm – stay away!

  3. Emotion – do the candles support your anticipated direction?

Try applying this formula to each of your trades and it should improve your result. Don’t let profit turn into a loss. Be patient. Study to the level that you know everything by heart.


Happy trading to all in the 2008!

  • #9,913
  • Jan 2, 2008 3:42am Jan 2, 2008 3:42am
i wait for a close below TL and 21,8 ma and a sell signal for macd
Attached Image (click to enlarge)
Click to Enlarge Name: eur.gif Size: 24 KB
  • #9,914
  • Jan 2, 2008 7:13am Jan 2, 2008 7:13am
Hi everybody,

I wish you all a happy and profitable 2008.
I'm back to work now ... I guess I'd better wait for the market to
develop, so in my opinion no trading today yet. For those that have
taken the eur/usd short this gmt morning: congratulations.

Greetings
  • #9,915
  • Jan 2, 2008 7:27am Jan 2, 2008 7:27am
Hello too to everyone....back to the routine so to speak. Hope everyone had a good and safe holiday. Yes, let's make 2008 even better than 2007!!!

Updates to the website coming soon:

-Quotes
-Charts
-A monthly review by the Jedi Master himself
-A full year's worth of printable 4 hour and 1 hour charts for 'study'
-And maybe the biggest addition...An alternative 1 hour entry called BladeRunner that follows the 4 hour trend that has the potential to make lots o' pips with minimal losses.

The site should be 'upgraded' this weekend. I'll re-post when it's all there....stay tuned kids.
  • #9,916
  • Jan 2, 2008 7:44am Jan 2, 2008 7:44am
Happy New Year everyone. I have done a lot of studying over the Holidays and I think it has helped a lot. I am very excited about the new year.

Palmer, Thanks for your website I look at it a lot. Your printable charts are worth their weight in gold.
  • #9,917
  • Jan 2, 2008 7:47am Jan 2, 2008 7:47am
Quoting Palmer
Hello too to everyone....back to the routine so to speak. Hope everyone had a good and safe holiday. Yes, let's make 2008 even better than 2007!!!

Updates to the website coming soon:

-Quotes
-Charts
-A monthly review by the Jedi Master himself
-A full year's worth of printable 4 hour and 1 hour charts for 'study'
-And maybe the biggest addition...An alternative 1 hour entry called BladeRunner that follows the 4 hour trend that has the potential to make lots o' pips with minimal losses.

The site should be 'upgraded' this weekend. I'll re-post when it's all there....stay tuned kids.
I want to see this bladerunner stuff Also thanks for the hard work.
Keep taking CT trades, I need more money
  • #9,918
  • Jan 2, 2008 8:08am Jan 2, 2008 8:08am
i short the pair at 1.4661.please give me advise about sl and tp
thx
Attached Image (click to enlarge)
Click to Enlarge Name: eur.gif Size: 32 KB
  • #9,919
  • Jan 2, 2008 8:25am Jan 2, 2008 8:25am
btw what is sl and tp? tp is is target price?
  • #9,920
  • Jan 2, 2008 8:26am Jan 2, 2008 8:26am
Quoting fxykl
btw what is sl and tp? tp is is target price?
sl= stop loss tp=take profit
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