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4 Hour Strategy (MACD)

  • #10,021
  • Jan 4, 2008 1:01pm Jan 4, 2008 1:01pm
was going to short gbpusd but it closed green by 1 tick lol. Oh well next week
Keep taking CT trades, I need more money
  • #10,022
  • Jan 4, 2008 1:07pm Jan 4, 2008 1:07pm
Quoting Ryanmcd
True, but I like having everything I can stacked in my favor to take a trade
Ryanmcd,

I like your 'conservative approach'. I'm in the process of 1. learning this system and 2. compiling my own 'rules'.

I've made it through page 90 so far with about 600 pages to go (slow but sure progress).

Do you mind sharing any other, what you might call obvious rules like the one discussed above (8 over 21 for long position)?

I too prefer the 'A trade' only line of thinking, but not sure what else constitutes an A trade.

Thanks again in advance for your time.

TNFPosterboy
  • #10,023
  • Jan 4, 2008 2:27pm Jan 4, 2008 2:27pm
Hi people, ok I have been going through the lessons and there is something I really can't wrap my head around and was wondering if the pro's in here could shed some light :-)

How do you decide between a TC and a LH or HL. Because it looks to me like the LH and HL's could initially be perceived as being TC's.

So you may enter on what you think is a TC but then one or two bars later you may get a HL or LH signal. So in that case do you stop and reverse? or what?

I know market rythm has to be taken into account but generally what do you do in this situation?
  • #10,024
  • Jan 4, 2008 3:32pm Jan 4, 2008 3:32pm
Quoting tnfposterboy
Ryanmcd,

I like your 'conservative approach'. I'm in the process of 1. learning this system and 2. compiling my own 'rules'.

I've made it through page 90 so far with about 600 pages to go (slow but sure progress).

Do you mind sharing any other, what you might call obvious rules like the one discussed above (8 over 21 for long position)?

I too prefer the 'A trade' only line of thinking, but not sure what else constitutes an A trade.

Thanks again in advance for your time.

TNFPosterboy
I got if from my older brother and He's a pro poker player. He does not play unles he has a edge. You have to take this same approach to the market. If you trade because there is nothing to do goto a casino and have fun and blow all you money and go back to work, the market is not the place. Trading is my living and I treat it as such, You have to spend time and look over charts over and over and get a feel for it. 4 years ago I printed out every day on the @ES from 1991 and read over them, it took about a year but after that I could call tops and bottoms on that market all day long and still can I just dont enjoy trading the 3min and honestly I dont need to trade so that's why I quit it. I love this method and it's well though out, no judgement you see this this and this you take the trade, dont think dont worry buy or sell put in a good stop and walk away. As I tell a lot of people the best trades some people take is when they put on a position and goto sleep because they dont screw with it When I am taking a trade I want the 8ma / 21ma and 89ma all lined up in my favor do I miss some trades? Sure but again I am going back to that rich deck, my brother did not make millions because he played hap-hazardly. Also if there is a huge news bar I just pass on it. Here I will post some of my trades and times I got in them this week. All of this is from MIG times same thing Phillip uses.

1. 1-02-2008 @ 16:00 Shorted USDJPY on the open of this bar, had a short all ma's where in line and it took out the 200ma Stop was @ 111.25 or the 200MA low risk trade had to take it.

2. 1-02-2008 @ 8:00 Shorted USDCHF, this is my all time fav stock setup, when the MACD rolls up all green then starts to go down and turn red. Also broke out the 200MA great setup, stop was @ 1.133

3. 1-2-2008 @ 8:00 Shorted EURCHF, same thing took out 200MA macd was not as clean as the USDCHF but still a good trade, all ma's lined up like I look for and that's about it.

On all these trade I do not use trend lines, fib's, or black magic I look at the chart and take the trade. I am not sure if I see them without drawing or not but I can eyeball it pretty well and know what is going to happen. Prob from reading that 13 years of 3min charts LOL. Have a good one everybody, and remember the market is not hard YOU make it that way.
Keep taking CT trades, I need more money
  • #10,025
  • Jan 4, 2008 4:21pm Jan 4, 2008 4:21pm
Quoting Micardo
Hi people, ok I have been going through the lessons and there is something I really can't wrap my head around and was wondering if the pro's in here could shed some light :-)

How do you decide between a TC and a LH or HL. Because it looks to me like the LH and HL's could initially be perceived as being TC's.

So you may enter on what you think is a TC but then one or two bars later you may get a HL or LH signal. So in that case do you stop and reverse? or what?

I know market rythm has to be taken into account but generally what do you do in this situation?
Assuming the market is trending up at a fast pace (along the 8ema) or even lessor so at a moderate pace (above the 21) then odds are greater that a TC will occur rather than a LH. Like wise in a down trend a TC over a HL. This is what RyanMcD means "to stack the deck". TC's in a trending market are the "no brainers". Obviously markets will change direction and an anticipated TC will turn into a HL or LH, but that's when stops, R:R, and trade management enter into play. If you're up 20-30 pips take some profit and set rest at BE. Then you lock in some gains, and can benefit from the TC. Alternatively, if it doesn't develop you may still even make a couple pips. Worst case, trade is a total loss, but within your rules at an acceptable R:R and an acceptable % of your account..

I hope this helps.
Eric
  • #10,026
  • Jan 4, 2008 8:53pm Jan 4, 2008 8:53pm
Quoting Ryanmcd
On all these trade I do not use trend lines, fib's, or black magic I look at the chart and take the trade. I am not sure if I see them without drawing or not but I can eyeball it pretty well and know what is going to happen. Prob from reading that 13 years of 3min charts LOL. Have a good one everybody, and remember the market is not hard YOU make it that way.
Ryanmcd,

Excellent insight. Thanks for the reply. Do you think it is advantageous to print and study any timeframes lower than the 4 hour? I have absolutely no problem doing the work, I just want to make sure that the work I'm doing is beneficial.

Thanks again for your input.

TNFPosterboy
  • #10,027
  • Jan 5, 2008 12:01am Jan 5, 2008 12:01am
Quoting tnfposterboy
Ryanmcd,

Excellent insight. Thanks for the reply. Do you think it is advantageous to print and study any timeframes lower than the 4 hour? I have absolutely no problem doing the work, I just want to make sure that the work I'm doing is beneficial.

Thanks again for your input.

TNFPosterboy

I would do the 4hr, it's what you are trading. Most of the time the markets all move the same flow. I say print out last year and go over it to start with. Look at it tick by ticket when you would take a trade when you would not.
Keep taking CT trades, I need more money
  • #10,028
  • Jan 5, 2008 4:08am Jan 5, 2008 4:08am
Ryan,

I have to ask if why you did not take the USDJPY short on 1/4/2008 12:00 (+2 GMT).

Was it due to the Non-Farm news? Was there something setting up there you did not like? Did you take it, and you are still holding?
  • #10,029
  • Jan 5, 2008 6:49am Jan 5, 2008 6:49am
Quoting BIL2205
Hello. I see that you trade Phillip's 5 minute system as well.Ryan is right. Please do not try to use 5 minute to enter a 4 hour trade. this will not only kill your account but also confuse other members of the forum who are relatively new to this system. 5 minute has nothing to do wiht 4 hour. Phillip has shown us how to use 1 hour for early entry or at the most 30 minutes for a break out / retrace entry. it is all in the forum. Not trying to critisize you but help you. Good luck.
Nadia
dear ryan and nadia
im really not trying to create a new system or change philips great h4 system wich shares it with us fo free . and i know u and philip and others working hard for this system and i never allow myself to change or disturb.
only i wanted to show on that post : if u look at the h4 chart it was a sell signal at 1.4720 ,u can close eyes and enter the trade after h4close ,but the thing i wanted to show was this: u can find the exact entry poit in smaller time frames like h1,m30,or even m5 after h4 signal because macd signals are valid from monthly to m1 (correct me if im wrong) and there is usually a shadow(tail) on next h4 candle which can save 5 to 10 pips for u or make a better entry and smaller stop loss at least . on that post i just show m5triangle give the sell signal exactly on the same 1.4720 which was correct signal both on h4 and m5 and price goes south to 1.4690 then and if one have take that position his account will be up by +30pips . i dont think positive pisps kills anyone's account .
any way . that was just a suggestion to look at smaller time frames after h4 signal for a better entry and not more.
and if phillip distinguish i should delete that post i get ready to dellete .
regards
  • #10,030
  • Jan 5, 2008 9:49am Jan 5, 2008 9:49am
Quoting unlv_tj
Ryan,

I have to ask if why you did not take the USDJPY short on 1/4/2008 12:00 (+2 GMT).

Was it due to the Non-Farm news? Was there something setting up there you did not like? Did you take it, and you are still holding?

I was still in the shorts, I try to hold a trade as long as I can not just 2-4hrs.
Keep taking CT trades, I need more money
  • #10,031
  • Jan 5, 2008 11:35am Jan 5, 2008 11:35am
Quoting Betard
I know some people trade USD/CAD using this method so I'll post this. I just got burned taking TC trade on this pair. Not sure why there was this huge spike up after the bad US news today but it went wayyyy past my stop. Anyone else take this trade?
I appreciate the trades that did not work out for some that have been posted recently.... I realize it is not easy to post a trade sometimes that you did not do well on. However this is a very good way for others to learn two things...first of all, this system is not the holy grail of trading....sometimes the market simply does not do what it signaled it was about to do. Especially around news time or opening/closing market times. Second of all that sometmes there are things on the chart that you dont see at first.... "You see what you KNOW to see" ..... increase your knowledge.... When you post your chart and let others with more knowledge have a look, they will see things that you did not see.... its not that you ignored them, you simply were "blind" to them.....

Thanks Ryan for pointing out that the moving averages need to be lined up properly.... remember the macd is the trigger AFTER the price action around the moving averages is telling you to watch for an macd confirmation. In fact on a personal note, Before i take a tc on the 4hr i will always look at the moving averages on the 1hr chart to see if those moving averages are also lined up properly 8,21,89. the exception to this is when the price has crossed inside the 21 towards the 89 as per the rules the price will move towards the 89 then return to the 21 before going to the 89... in this case, in a buying scenario. the 21 will be above the 8 however the 89 will be above also (see EURUSD Around August 22 2007)
I have posted here the usdcad trade that spiked up....surprised by this? Why?

As you can see the market rythym rules were satisfied. It got inside the 21(magenta) and the 8(yellow) followed and got above the21, and just as market rythym says, it made a return to the 21 before going right thru the 89(deepskyblue) the dotted blue line is the 200, (a very powerful trend direction determing moving average)...the fact that it blew right through it is very significant if it stays above it....this was a fast spike though and very difficult to enter with confidence. I personally entered with a short when it got to the 89/200 level but with a very tight stop because i knew if it did not turn here something else was going on.......

On another note....in regard to entering the market after looking at the 5 minute.....I personally have done that.....just remember that the ONLY reason you do this is because the 4hr rythym and macd has given a signal that now is the time to enter the market in a certain direction.....If the 4hr candle has no tail then i just jump in, but if the candle has a tail on the bottom and it is giving me a sell signal i want to know if that tail was formed in the last hour or if it was in the first hour of the 4 hr candle and during the last 3hrs it has been moving down steadily....I usually just go down to the 1hr and more rarely the 30 minute but yes there have been occasions where i have used the 5min to "check the pulse" of the market....but remember the 4hr is king....
It has been mentioned over and over on this thread for almost a year that the usdcad does not work well with this system......the stops have to be large....and the moves are erratic......hence the name "LOONIE"

This coming week should be a breeze compared to what we have weathered in the last three weeks with Christmas, New Years , and Nfp..... and a thin market yet some on this thread still made money. Listen to them.
We have Pending Home Sales Tuesday, and Unemployment Claims Thursday effecting Usd...But we should be used to a few bumps in the road by now.....
and on another point.....if you post a chart try to make the moving averages the same colors that we are used to seeing like the ones in Phillip's pdfs so that they are easily recognized. To many dotted lines can be confusing....you can always change them back to what you like after you post a pic. Or labeling them on your chart would be helpful.....
Good weekend to all......There is no substitute for studying the charts. Weekends are a good time to reflect on them.....but dont ignore other priorities in your life..... learning to trade can be consuming. Enjoy the family get outside....catch up on sleep or whatever other thing you have been letting take second place. You know what it is....The market will still be here your 16 year old child will not....
Well thats my 2 pips worth....I hope i havent wasted your time. But what do i know, Im just a carpenter............. pipip...Jimdandy
Attached Image (click to enlarge)
Click to Enlarge Name: usdcad.gif Size: 23 KB
  • #10,032
  • Jan 5, 2008 12:07pm Jan 5, 2008 12:07pm
Quoting Ryanmcd
I was still in the shorts, I try to hold a trade as long as I can not just 2-4hrs.
Ah! Light bulb goes off.

Do you normally take anything off the table (25 pips on 1/2, move stop loss to break even)?

What do you look for to get out of a trade? A trailing stop (which I cannot use in Oanda)?

Thank you!
  • #10,033
  • Edited 2:07pm Jan 5, 2008 12:25pm | Edited 2:07pm
Quoting Micardo
Hi people, ok I have been going through the lessons and there is something I really can't wrap my head around and was wondering if the pro's in here could shed some light :-)

How do you decide between a TC and a LH or HL. Because it looks to me like the LH and HL's could initially be perceived as being TC's.

So you may enter on what you think is a TC but then one or two bars later you may get a HL or LH signal. So in that case do you stop and reverse? or what?

I know market rythm has to be taken into account but generally what do you do in this situation?
Hi Micardo!

Know that you have already gotten a great answer from our JimDandy, but I'd like to add to his comments. You are right about the lower high, lower low being a trend continuation under certain circumstances. Remember a trend is defined essentially by higher highs/higher lows (uptrend), lower lows/lower highs (downtrend). W/this in mind, you should look at the price action on the chart, look at the rhythm of the market, plan your trade and stick to your plan. If a pattern changes on 1 MACD bar, I do not abort your plan -- it is normal for price to fluctuate. & depending on the time of day, you may see a conflicting signal on the macd (especially between Asia and Eur sessions). The only reason to abort a trading plan is if something substantial has occurred to change the reasons why you took the trade in the first place. It is unwise to follow MACD direction solely and continually stop and reverse -- more than likely you will be whipsawed out of the market and lose on each trade.

Now, quickly backt to the lower high/lower low in a CT type trade. These are usually very good indicators that a trend may be weakening and a good opportunity may present itself to you. Look back over your charts and make notes of price action on the pairs you trade. Also, when taking a CT trade, it is usually a good idea to take profit at 20 pips and move 1 or 2 lots to BE for a chance to participate in a retrace -- especially if price has closed below/above (uptrend/downtrend) below the 21. Lastly, always make sure you have room to the 8 before taking a CT and that the stop doesn't have to be large. You will want to be defensive around the MA's as price may reverse at those areas. Lastly, if the MACD is forming a lower high, while price is still climbing (or vice versa), you have divergence developing, and this is a good time to think the trend could be weakening -- only exception is a continuation pattern (consolidation in the form of a flag). The MACD is an oscillator and will give false signals in a trending environment -- the lower high/round top pattern will most likely be a breather before the next leg up. It is very important to profile your market and decide if it is trending/ranging -- then you can plan your trade wisely. A TC in a ranging market will most likely give you a bad entry and a losing trade -- a CT signal in a trending market will most likely give you a loss too. Stop and reverse should only be used when important price levels you have identified have been breached; then you may want to wait for a retrace to the area to enter.

Wishing you all the best in your trading career!
Pips
  • #10,034
  • Jan 5, 2008 12:46pm Jan 5, 2008 12:46pm
Quoting JimDandy




On another note....in regard to entering the market after looking at the 5 minute.....I personally have done that.....Me Too! There are certain times that a smaller timeframe allows you to enter an established trend at a favorable price w/a small stop. It also can be useful on some very volatile pairs -- As w/each of our unique "short-cuts" we need to practice them and make sure we are able to decide when to pull that "tool" out of our "trading tool box." The 5 min. chart can be very dangerous for those of us who lack patience and discipline to wait for the perfect set-up


but remember the 4hr is king....
It has been mentioned over and over on this thread for almost a year that the usdcad does not work well with this system......the stops have to be large....and the moves are erratic......hence the name "LOONIE"....
Also, for some of us, the commodity currencies present a challenge in themselves. They have trended very nicely for a long time -- but is that climate changing? This year should be very interesting -- and it may drive me "Loonie." (and I'm not refering to the bird on the CAD coin!)

This coming week should be a breeze compared to what we have weathered in the last three weeks with Christmas, New Years , and Nfp..... and a thin market yet some on this thread still made money. Listen to them.
We have Pending Home Sales Tuesday, and Unemployment Claims Thursday effecting Usd...But we should be used to a few bumps in the road by now.....
Often times, I have found the news to present good opportunities to enter the established trend. Example, Dollar seems to be gaining strength temporarily (evidenced in NFP rxn?) so, the spikes upward in G/U have presented nice selling opportunities per my trade plan. Will wait to see what happens next week, as I expect the funds to start re-positioning soon (they have to reinvest their profit taking from December...hmmm...wonder where they will put it?? January is typically good for the dollar and US stock market...wonder again if that will prove true...just some thoughts to chew on while getting back into the groove).

Good weekend to all......There is no substitute for studying the charts. Weekends are a good time to reflect on them.....but dont ignore other priorities in your life..... learning to trade can be consuming. Enjoy the family get outside....catch up on sleep or whatever other thing you have been letting take second place. You know what it is....The market will still be here your 16 year old child will not....Golly, You are a wise man!!! This advice is priceless and sooooooooo true! Honestly, I get out of harmony through the year, and trading sometimes consumes me....Then I get a bit grouchy....YIKES!
Well thats my 2 pips worth....I hope i havent wasted your time.....Are you kidding? My goodness...Your post is worth way more than 2 pips and (they) are NEVER a waste of time!! As my stuck in the 80's vocab goes....YOU ROCK!!! (LOL!)

But what do i know, Im just a carpenter....OK -- No offense meant to those who think I'm being disrespectful to a higher being (skip this part now if I have any possibility of offending and accept my sincere appologies in advance).....Hmmmm....seems to me I recall another humble carpenter who did amazing things and bettered humanity....

............ pipip...Jimdandy
Now for a good laugh...I couldn't submit this message b/c it was "too short"! guess I have to type outside the lines!
  • #10,035
  • Jan 5, 2008 12:49pm Jan 5, 2008 12:49pm
Hi Palmer!

I'm looking forward to checking out "Blade Runner" -- and I promise to click on many ads

Hope your brain is decompressed and no longer soggy...Yikes!

Glad you had a safe holiday and that Johnny W. didn't knock you for a loop on 12-31

Pips
  • #10,036
  • Jan 5, 2008 12:50pm Jan 5, 2008 12:50pm
Quoting EricthePip
Assuming the market is trending up at a fast pace (along the 8ema) or even lessor so at a moderate pace (above the 21) then odds are greater that a TC will occur rather than a LH. Like wise in a down trend a TC over a HL. This is what RyanMcD means "to stack the deck". TC's in a trending market are the "no brainers". Obviously markets will change direction and an anticipated TC will turn into a HL or LH, but that's when stops, R:R, and trade management enter into play. If you're up 20-30 pips take some profit and set rest at BE. Then you lock in some gains, and can benefit from the TC. Alternatively, if it doesn't develop you may still even make a couple pips. Worst case, trade is a total loss, but within your rules at an acceptable R:R and an acceptable % of your account..

I hope this helps.
Eric
Hi Eric,

Ok I understand. So could you stop and reverse in this situation? I assume if the signal is strong enough then that is an appropriate action to take?
  • #10,037
  • Jan 5, 2008 3:19pm Jan 5, 2008 3:19pm
Hi there, Phillip.

I have tried several times to d/l your spread sheet for your 4hr strategy, but cannot. I get error messages most all of the time.

Can you advise whenever you have some free time, and a Peace Full New Year to you and your family, and the rest of the traders here.

Dan Sayles
  • #10,038
  • Jan 5, 2008 5:28pm Jan 5, 2008 5:28pm
Quoting pips4uandme
Hi Palmer!

I'm looking forward to checking out "Blade Runner" -- and I promise to click on many ads

Hope your brain is decompressed and no longer soggy...Yikes!

Glad you had a safe holiday and that Johnny W. didn't knock you for a loop on 12-31

Pips

I remeber when I was talking about adding using the 1 hours a few months ago using fractials good stuff, I like and will use this macd as well.
Keep taking CT trades, I need more money
  • #10,039
  • Jan 5, 2008 5:38pm Jan 5, 2008 5:38pm
Anyone use the Strategy Tester vHandsTrade found in the Help Topics under MQL4.community? (I'm using Interbank FX demo) I'm trying to study the 4H charts and I'm finding this tool useful, but I've also heard concerns about the data being correct.

Any input is welcome.

Testing Visualization: Manual Trading

TNFPosterboy
  • #10,040
  • Jan 5, 2008 5:51pm Jan 5, 2008 5:51pm
Quoting tnfposterboy
Anyone use the Strategy Tester vHandsTrade found in the Help Topics under MQL4.community? (I'm using Interbank FX demo) I'm trying to study the 4H charts and I'm finding this tool useful, but I've also heard concerns about the data being correct.

Any input is welcome.

Testing Visualization: Manual Trading

TNFPosterboy
Here is an attachment to help explain the strategy tester...

Disregard the 'junk' in the top left corner...
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.gif Size: 16 KB
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