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4 Hour Strategy (MACD)

  • #10,761
  • Jan 27, 2008 12:54am Jan 27, 2008 12:54am
Quoting bshadroo
thx hijack
before i learn the phillips system,i was entering in trade in each support and resistance .the S/R levels which i draw was correct but sometimes price was breaking the levels and got me out.
but with this great system i can fillter the trades and trade just the high probabilities. macd signal can realy filter wrong trades for me.
actually we should say thx phillip and others how are working for this system and helping people.
Have a nice weekend..
  • #10,762
  • Jan 27, 2008 6:52am Jan 27, 2008 6:52am
Quoting Phillip Nel
Info
Phillip,
Thanks for these great suggestions. Many of us indeed struggle with this issue. I often find myself saying, "Wow, price has moved so much in the direction of my trade! Now should I take profits? Or maybe I should add to the position?" Some consider exits more important than entries, perhaps because on several tfs, we've all seen losing trades turn into winning ones [or maybe more often the other way around].
Profit taking is not only a matter of personal trading style, it is a matter of reading the ongoing situation and managing your trade. If you see, an hour or a day after your entry, stronger confirmations for the direction you've taken, why not add to the position? Of course, you'd need to consider this a new trade, with proper MM, logical SL and TP - which should apply, IMHO, to both positions. If, on the other hand, you read a reversal, consider closing the trade at once, tightening up your SL, or at least taking partial profit. I don't think these should be a function of how much price moved since your original entry, or what direction - it should be derived from reading the chart as a whole, perhaps the way you would before a new trade.
Traders, don't do the mistake of adhering to "at least 70 pips", or whatever, just to see the trade turn around at 67 pips, and eventually becoming a loss, just because price didn't reach what you've asked for. Your analysis at entry is only valid at your entry. An hour or a day later, you have much better, i.e. updated, info. Use it wisely.
Any other perspectives on profit taking would be much appreciated. Thanks!
  • #10,763
  • Edited 1:27pm Jan 27, 2008 1:20pm | Edited 1:27pm
Quoting Phillip Nel
shorted usdjpy @ the 4H 89 EMA, up now 100 pips. Post by Mike_dg(Post 10749)

I have responded and PM to this situation.

The trade by Mike was clearly not according to the 4H MACD strategy. If it was entered according to the rhythm of the 4H(which is the core and heart of this system) then entry would have been after resistance was found against the 89sma and then on a move away from the 89sma at around 107.25 on the 1Hour. So he entered short at the 89sma purely on a high probabilty trade that the 89sma is going to act as resistance with that small shooting star and hanging man. This time it worked but for the new ones to the thread please remember that resistance/support has to be proven and the MACD must confirm and or give a very positive indication of a reversal before the 1H can be applied as entry.
Hope this was made clear. When posting trades, please give some more details so that the other can benefit from your trade as far as the learning curve is concern.
Thanks
Phillip

This type of trade is a high probablility trade AFTER the turn........usually........but make sure to post info on the reasoning behind taking the trade.....be informative.....for a little better example of how to explain your position on a trade involving a bounce from the 89 see this post by Palmer back on page 590...
http://www.forexfactory.com/showpost...postcount=8849

p.s. .Certainly not trying to discourage anyone from posting here.....just trying to get all to ask themselves this question before they hit the "submit" button... Will this post teach something about the system? Now of course if you have a question that doesnt apply....try to teach with your posts if you can .....if its a post about your trade you took........look forward to the posts in the future.......dont be afraid to ask a question.....if its been answered before.......we'll send you to the answer........pipip.......Jimdandy
  • #10,764
  • Jan 27, 2008 2:26pm Jan 27, 2008 2:26pm
Good news:

A few months ago I read a post here where a member, not sure who, said that they attended a seminar where the speaker was talking about Phillip's method. This raised a red flag with me because the method was not copyrighted. I informed Phillip about this and told him that it might be a good idea to see if this could be issued a US Copyright to protect him as being the author where nobody else could claim it or sell it. I applied for a copyright for Phillip and got word last week that he WILL be granted a registered copyright for the method. On the website some of you may have noticed the pending copyright icon on the bottom of the page, soon it will say registered copyright...good stuff.

I made a quick change to the forum:

The attachments are viewable by non-registered members. I was PM'd by...hmmm...forgot who, and thought it would be a good idea to allow this because I think everyone could benefit. It may help to answer some questions for some of the new folks.

The sun has finally come out in the Panhandle of Florida and it's in the mid 60's for a change....gotta go outside for a while...
  • #10,765
  • Jan 27, 2008 3:03pm Jan 27, 2008 3:03pm
Looking at the weekly chart we can see that the EU took a strong bounce off of the 21

Attached Image (click to enlarge)
Click to Enlarge Name: eurusdweekly.gif Size: 14 KB


You can see on the daily what happened last week. After the little one hour candle on Sunday. Monday was a big down day with the markets closed in us for Holiday, then Tuesday .75 interest rate announcement day. Then wednedsay made the hammer testing the 89 (blue") sma again, then thursday a big green day....and then friday a 61.8 retrace of Thursday. The 8and 21 look as if they are stacked up and price is above the 89 on daily....may see the 8 cross up above the 21 soon?

Attached Image (click to enlarge)
Click to Enlarge Name: eurusddaily.gif Size: 15 KB


On to the 4hr

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd4hrtodate.gif Size: 23 KB


As you can see on this chart....after all the turmoil....we are right back where we started at the beginning of this year! And notice the 89(blue)200(dark dotted) and 365(light dotted) are all flat!.....so what happens next you ask?


Attached Image (click to enlarge)
Click to Enlarge Name: eurusd4hrmacd.gif Size: 19 KB


Well now that we have looked at the Weekly bounce and the Daily Retrace....and we know that New Home Sales Data are due out Monday, and a possible interest rate drop...(practically guaranteed)maybe both bad for dollar value......Im dont know about you but I'm going to be looking for a Buying Tc on the Macd4hr.....however we are assuming that the 21ema support will hold.....it still could go to 200 then move up.......news could be good for dollar....but I know I will be ready waiting for the market to give me a signal.......how bout you?.......pipip ........Jimdandy
  • #10,766
  • Jan 27, 2008 3:35pm Jan 27, 2008 3:35pm
Quoting Phillip Nel
Info
I'll check this out in some backtests...using the 55.....I posted this a while back but couldnt come up with a rule/use regarding the 55.

http://www.forexfactory.com/showpost...postcount=8574

There must be some merit to its use though as we both are thinking along the same lines here......I was using an sma instead of and ema for some reason........dont remember the reasoning behind it (if there was any)......Like the hedging plan.....im gonna use that.......with Ibfx I have that option......good pips to you and hope you regain work internet privileges again.....may be time to get a sma rt phone.......anybody want to spring for Phillip an Iphone? LOL........pipip.......Jimdandy
  • #10,767
  • Jan 27, 2008 5:37pm Jan 27, 2008 5:37pm
Hi everybody,
I've been reading the thread for a few months now, and now I feel like I've absorbed enough of the information to participate in the discussion. Big thanks to all who have put so much time and effort into the project.

JimDandy's post on the Eur/Usd got me thinking about the relationships between the time frames. I know part of Phillip's system is using the larger time frames to draw trend lines and S/R lines, but how much does the rhythm of the larger time frames dictate trading decisions, if at all?

Secondly, regarding tomorrow's New Home Sales announcement from the US, could even some tremendously good news be enough to turn around the feelings towards the housing market? Everything I read about the New Homes market, and real estate in general, says that the US won't see a turnaround for another 2-3 years. Could a single announcement cause more than just a spike and actually change the current rhythm of the Eur/Usd?

Lastly, there are several news events this week. What's the best way to treat weeks like this? With so much news coming out, it seems like things could get choppy.

Any thoughts on the matter would be greatly appreciated. Thanks to all.
The problem with experience is that the test comes before the lesson.
  • #10,768
  • Jan 27, 2008 6:00pm Jan 27, 2008 6:00pm
Thanks JimD...

I'm no Fundie expert, but the fact that the USD hasn't went to "you know where" given 3/4 pt rate cut and the 1/2 we most likely will get on Wednesday, bodes positive for the dollar.... What else could make it go lower, short of a major bank failing or US Treasury sending via email .pdf's for all of us to print our own money???

Should be interesting to see what this week's data will do (FMOC, GDP, and jobs)....

Eric

Quoting JimDandy
Looking at the weekly chart we can see that the EU took a strong bounce off of the 21

Attachment

You can see on the daily what happened last week. After the little one hour candle on Sunday. Monday was a big down day with the markets closed in us for Holiday, then Tuesday .75 interest rate announcement day. Then wednedsay made the hammer testing the 89 (blue") sma again, then thursday a big green day....and then friday a 61.8 retrace of Thursday. The 8and 21 look as if they are stacked up and price is above the 89 on daily....may see the 8 cross up above the 21 soon?

Attachment

On to the 4hr

Attachment

As you can see on this chart....after all the turmoil....we are right back where we started at the beginning of this year! And notice the 89(blue)200(dark dotted) and 365(light dotted) are all flat!.....so what happens next you ask?


Attachment

Well now that we have looked at the Weekly bounce and the Daily Retrace....and we know that New Home Sales Data are due out Monday, and a possible interest rate drop...(practically guaranteed)maybe both bad for dollar value......Im dont know about you but I'm going to be looking for a Buying Tc on the Macd4hr.....however we are assuming that the 21ema support will hold.....it still could go to 200 then move up.......news could be good for dollar....but I know I will be ready waiting for the market to give me a signal.......how bout you?.......pipip ........Jimdandy
  • #10,769
  • Edited 7:03pm Jan 27, 2008 7:00pm | Edited 7:03pm
In the same way that the bladerunner system is used to enter on the 1hr chart based on the 4hr chart......I use the Daily chart to enter on the 4hr....Sometimes on the 4hr in a trend. the price only comes back to the 8 but not the 21.....and if you are waiting for a bounce off of the 21 for the best high probablility you may have to wait until the trend is slowing down to finally get in....The same thing happens on the daily.. heres and example.

Attached Image (click to enlarge)
Click to Enlarge Name: eudaily.gif Size: 19 KB


This is the same chart on the 4hr......same arrow same shading......... you use the 4hr to enter a bounce off of the 8ema of the daily....notice the nice Tc on the macd......the ones that really know this system use this same technique on the 4hr in their 1hr entries......

Attached Image (click to enlarge)
Click to Enlarge Name: eu4hr.gif Size: 18 KB


it works on larger time frames too......here is a weekly coming back to the 8..

Attached Image (click to enlarge)
Click to Enlarge Name: euweekly.gif Size: 17 KB


and here is the nice tc on the daily that preceeded the tc on the 4hr that preceded the tc on the 1hr......layers and layers of the same thing....

Attached Image (click to enlarge)
Click to Enlarge Name: eudaily2.gif Size: 19 KB


the rythym works people! The longer the timeframe, the more dependable the signal.....but you need deep pockets on these big timeframes but not as much as you might think if you only take these high probablily trades......pipip........Jimdandy

p.s.. If you look at this post over and over againg until you understand what you are looking at.....you have come a long way in understanding what you are looking for......study these charts.....
  • #10,770
  • Jan 27, 2008 8:00pm Jan 27, 2008 8:00pm
Quoting EricthePip
Thanks JimD...

I'm no Fundie expert, but the fact that the USD hasn't went to "you know where" given 3/4 pt rate cut and the 1/2 we most likely will get on Wednesday, bodes positive for the dollar.... What else could make it go lower, short of a major bank failing or US Treasury sending via email .pdf's for all of us to print our own money???

Should be interesting to see what this week's data will do (FMOC, GDP, and jobs)....

Eric

This is why I think we are still due for some volatility into this week...volatility = long tails and long bars.

If we got .75 already and if we only get .25 more that might be a huge disappointment for the eu and we may see the $ strengthen as you said. .50 might be disappointing to 'expected' and another .75, although unlikely should be positive for the eu. However, I'm guessing the the Fed is going to take it slow from here on out. They will see how the .75 plays out and take small steps from here at .25 each meeting. Just my 2 cents here. I've said it many times...I'm no eekonomyst, I'll let the charts decide.
  • #10,771
  • Jan 27, 2008 8:02pm Jan 27, 2008 8:02pm
Quoting JimDandy
In the same way that the bladerunner system is used to enter on the 1hr chart based on the 4hr chart......I use the Daily chart to enter on the 4hr....Sometimes on the 4hr in a trend. the price only comes back to the 8 but not the 21.....and if you are waiting for a bounce off of the 21 for the best high probablility you may have to wait until the trend is slowing down to finally get in....The same thing happens on the daily.. heres and example.

Attachment

This is the same chart on the 4hr......same arrow same shading......... you use the 4hr to enter a bounce off of the 8ema of the daily....notice the nice Tc on the macd......the ones that really know this system use this same technique on the 4hr in their 1hr entries......

Attachment

it works on larger time frames too......here is a weekly coming back to the 8..

Attachment

and here is the nice tc on the daily that preceeded the tc on the 4hr that preceded the tc on the 1hr......layers and layers of the same thing....

Attachment

the rythym works people! The longer the timeframe, the more dependable the signal.....but you need deep pockets on these big timeframes but not as much as you might think if you only take these high probablily trades......pipip........Jimdandy

p.s.. If you look at this post over and over againg until you understand what you are looking at.....you have come a long way in understanding what you are looking for......study these charts.....

Nice charts Jim..the moral to all of this is to recognize the trend and don't fight it.
  • #10,772
  • Jan 27, 2008 8:39pm Jan 27, 2008 8:39pm
The EU:

The 4hr and 1hr are forming another one of those scenarios where there is support in the works. The 4hr has the 89/21/8 grouped together waiting for something to happen. I've got a pivot and the 61.8 as a probable target to the downside if support is broken...audible alarm set if price gets below this. To the upside, back to the 100 Fib #, but that's 100 pips away but that might be too much to ask....

Congested ma's are hard to see through...
Attached Images
  • #10,773
  • Jan 27, 2008 8:51pm Jan 27, 2008 8:51pm
Yes, nice charts and great points. All time frames are fractals of a larger move and most of the time move in Fibonacci ratios... And most the MA's we trade are Fibonacci numbers (8,21,89). Interesting to note the candle patterns drilling down from a monthly to a daily to the 4hr to the 1 hour.

Good thing about this system is you don't have to know any thing about fractals or Fibs.... I still need to learn patience and letting the trades come to me. I learn so much by looking at Phil's trade logs (thanks Phil for posting live and the frequent edits, it's also great having the original and subsequent post/page #'s). Then I look at my trade logs and wonder, What the ")$(@)$(*"??? Still learning, in month 2 of demo mode....

Eric

Quoting JimDandy
In the same way that the bladerunner system is used to enter on the 1hr chart based on the 4hr chart......I use the Daily chart to enter on the 4hr....Sometimes on the 4hr in a trend. the price only comes back to the 8 but not the 21.....and if you are waiting for a bounce off of the 21 for the best high probablility you may have to wait until the trend is slowing down to finally get in....The same thing happens on the daily.. heres and example.

Attachment

This is the same chart on the 4hr......same arrow same shading......... you use the 4hr to enter a bounce off of the 8ema of the daily....notice the nice Tc on the macd......the ones that really know this system use this same technique on the 4hr in their 1hr entries......

Attachment

it works on larger time frames too......here is a weekly coming back to the 8..

Attachment

and here is the nice tc on the daily that preceeded the tc on the 4hr that preceded the tc on the 1hr......layers and layers of the same thing....

Attachment

the rythym works people! The longer the timeframe, the more dependable the signal.....but you need deep pockets on these big timeframes but not as much as you might think if you only take these high probablily trades......pipip........Jimdandy

p.s.. If you look at this post over and over againg until you understand what you are looking at.....you have come a long way in understanding what you are looking for......study these charts.....
  • #10,774
  • Jan 27, 2008 8:58pm Jan 27, 2008 8:58pm
We are between a rock and a hard place here on the eurusd.......the euro cant take the 1.50 level and the dollar cant stand to be worth any less......yet we're going to reduce the interest.......the dollar "needs to go up and the Euro 'needs" to come down.......how to fulfill those needs is the drama that will unfold before us in the coming days....weeks? And after its done we'll look back at the chart and say..."yep, there it is on the chart, the rythym gave us the signal , why didnt we take it?" LOL......Any spike on Wednesday with the announcement will be very short lived.....but the problem is that usually the rythym is right....what ever it is indicating before a news announcement....is usually correct ....after the craziness of the news is over.......and right now things need to turn down for the Eurusd to the 200 or something to nullify the signal on the weekly ...to get the 8 below the 21 on the daily and the price action below the 89...on the daily....on the 4hr this would be a solid rejection downward from the 89 and a zero cross on the macd....and a test of the 200.....all of this would be perfect to set up the rythym to agree with a down turn of the eurusd.....the answer is an easy one to give ....."wait and see" .......however the little "gotta trade" demon in our heads will be pestering us......ignore him...or her....patience .....self-control......this is the hard to attain part of trading....pipip.......Jimdandy
  • #10,775
  • Jan 28, 2008 1:09am Jan 28, 2008 1:09am
Hi everybody,

I have learn this system and try to applied to my live account, good result, but can anyone confirm me, do I trade correctly with 4H MACD style ?

Today I shorted EJ and UJ, I saw price has left EMA21 for both pairs, so found resistance on EMA21, then I wait for a moment till it has enough pips difference to make EMA21 as my SL, and hit an entry on that value.

Since couldn't find any other EMA below entry as my support, so I use Fibo to determine my TP.

Summary is:
- EJ, short at 156.15, SL/TP: 156.60/155.60 closed at 156.60
- UJ, short at 106.54, SL/TP: 106.75/106.05 closed at 106.05

So can anyone confirm do my 4H MACD trading already correct ? or I have misunderstanding on something ? especially on defining SL and TP ?

Sorry can-t post my chart, since I used PDA right now, and have no idea how to attach image using this device hehehehhe

Thanks & Rgds,
  • #10,776
  • Jan 28, 2008 2:28am Jan 28, 2008 2:28am
Quoting ariefdff
Hi everybody,

I have learn this system and try to applied to my live account, good result, but can anyone confirm me, do I trade correctly with 4H MACD style ?

Today I shorted EJ and UJ, I saw price has left EMA21 for both pairs, so found resistance on EMA21, then I wait for a moment till it has enough pips difference to make EMA21 as my SL, and hit an entry on that value.

Since couldn't find any other EMA below entry as my support, so I use Fibo to determine my TP.

Summary is:
- EJ, short at 156.15, SL/TP: 156.60/155.60 closed at 156.60
- UJ, short at 106.54, SL/TP: 106.75/106.05 closed at 106.05

So can anyone confirm do my 4H MACD trading already correct ? or I have misunderstanding on something ? especially on defining SL and TP ?

Sorry can-t post my chart, since I used PDA right now, and have no idea how to attach image using this device hehehehhe

Thanks & Rgds,
Hi ariefdff,
Looking at my charts (yours may differ a bit) I dont see anything suggesting to short at that price level. What you want to watch for is if price will find support at the 21 then give a TC upwards to the 89 or break the 21 then move back up to the 21 and give a TC downwards with MACD confirming any price action.

Last week when price found resistance at the 89 there was a sell signal which would've been a good place to go short to the 21 and possibly still be holding if you decided not to close all the trade (see chart).

As far as SL and TP, I cant tell you where I would've put it because I would'nt have entered this trade. But for future trades you can use previous highs/lows of candles, MA's, fibs, whatever you prefer or which ever one fits the current trade you may take, anywhere the next S or R area may be.
Hope this helps.

Anyone feel free to add you thoughts if you like.
Attached Image (click to enlarge)
Click to Enlarge Name: EJ.UJ.GIF Size: 22 KB
  • #10,777
  • Jan 28, 2008 2:30am Jan 28, 2008 2:30am
Quoting JimDandy
We are between a rock and a hard place here on the eurusd.......the euro cant take the 1.50 level and the dollar cant stand to be worth any less......yet we're going to reduce the interest.......the dollar "needs to go up and the Euro 'needs" to come down.......how to fulfill those needs is the drama that will unfold before us in the coming days....weeks? And after its done we'll look back at the chart and say..."yep, there it is on the chart, the rythym gave us the signal , why didnt we take it?" LOL......Any spike on Wednesday with the announcement will be very short lived.....but the problem is that usually the rythym is right....what ever it is indicating before a news announcement....is usually correct ....after the craziness of the news is over.......and right now things need to turn down for the Eurusd to the 200 or something to nullify the signal on the weekly ...to get the 8 below the 21 on the daily and the price action below the 89...on the daily....on the 4hr this would be a solid rejection downward from the 89 and a zero cross on the macd....and a test of the 200.....all of this would be perfect to set up the rythym to agree with a down turn of the eurusd.....the answer is an easy one to give ....."wait and see" .......however the little "gotta trade" demon in our heads will be pestering us......ignore him...or her....patience .....self-control......this is the hard to attain part of trading....pipip.......Jimdandy
I like that, the "the little trade demon". I agree with your post, E/U seems to be in no mans land at the moment (at least in my mind). Although it does seem to be finding support especially looking on the 1H (look at all those aimless candles right above the 365 on 1H). The thing is they were over Friday evening and Sunday night which doesnt mean much to me. I wouldnt feel happy taking the trade based on these candles. So Im waiting and as luck would have it I have a meeting all morning to keep that "little trade demon" away from the laptop.
  • #10,778
  • Jan 28, 2008 3:01am Jan 28, 2008 3:01am
Quoting MtnMan
Hi ariefdff,
Looking at my charts (yours may differ a bit) I dont see anything suggesting to short at that price level. What you want to watch for is if price will find support at the 21 then give a TC upwards to the 89 or break the 21 then move back up to the 21 and give a TC downwards with MACD confirming any price action.
Hi MtnMan,

Thanks for the explanation, phew lucky enough my TP got hit

Ok, so the key are EMA21 & SMA89, and MACD for sure. Ok, now price on EJ is up, already hit EMA21 and soon looks will exceed EMA8, if candle close and price still go upwards, it should form a nice setup for long entry isn't ? because it find support at either EMA21 or hopefully EMA8 and resistance at SMA89.

Please CMIIW
  • #10,779
  • Jan 28, 2008 3:23am Jan 28, 2008 3:23am
i entered base on h1 when TL#1 breaked up and after a retrace near the circle which is the conjunction of 2ma's and 2TL's
i think i'll close this and wait for a h4 confirmation (after 1:30 hours in my broker) for another entry
Attached Image (click to enlarge)
Click to Enlarge Name: chf.gif Size: 39 KB
  • #10,780
  • Jan 28, 2008 4:10am Jan 28, 2008 4:10am
Hello

I don't know if anybody finds the following interesting and if it is actually usuable in this thread or anywhere else. But I will post it anyway and then people can look at it themselves from time to time.

CME Group Fed Watch – January 25, 2008
In advance of next week's Federal Open Market Committee meeting on January 29-30, the CME Group will be reporting daily rate change probabilities in the FOMC's federal funds target rate, as indicated by the 30-Day Federal Funds futures contract. The 30-Day Federal Funds futures contract is a key benchmark interest rate barometer that reflects the forward overnight effective rate for excess reserves that are traded among commercial banks in the U.S. federal funds market.
Based upon the January 25 market close, the 30-Day Federal Funds futures contract for the February 2008 expiration is currently pricing in a 100 percent probability that the FOMC will decrease the target rate by at least 25 basis points from 3-1/2 percent to 3-1/4 percent at the FOMC meeting on January 30.
In addition, the 30-Day Federal Funds futures contract is pricing in a 70 percent probability of a further 25-basis point decrease the target rate to 3 percent (versus a 30 percent probability of just a 25-basis point rate decrease).
Summary Table
January 23: 76% for -50 bps versus 24% for -75 bps.
January 24: 24% for -25 bps versus 76% for -50 bps.
January 25: 30% for -25 bps versus 70% for -50 bps.
January 28:
January 29:
January 30: FOMC decision on federal funds target rate.

http://www.cmegroup.com/trading/inte...fed-watch.html

Warning: The above predictions are pretty accurate, and more so closer to the decision date.

What is unknown is if the above has any effect on forex (and the magnitude of the effect). In the case of GBPUSD I think it has, this time. Usually is very tricky to trade on these fundamentals.

The best would be to first see some rhythm in the market and then take it from there.

The usual relationship is: interest rate down, less demand for the country's bonds, dollar depreciates. But fundamentally it must be compared to the other part of the currency pair and what has been happening with their interest rates. For example if the interest rate in the UK would increase tomorrow, it is nearly a sure thing to go long GBPUSD if the Fed actually does decrease the FED rate and if both changes were not reflected/expected in the market (GBPUSD).
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