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4 Hour Strategy (MACD)

  • #15,021
  • May 22, 2008 5:31pm May 22, 2008 5:31pm
hi all,

pls can u help me determine if i am right in thinking there is a possible short on the eur/usd if the price breaks the 21 ema and the macd continues the downtrend hence giving a tc signal.

if the above does occur would you take a short on the next candle or wait for the price to pull back to 21 ema, and then enter the short as per the market rhythm?

i am still new so not really sure at what point to enter.

your opinion would be great, appreciate if you could let me know if i am reading the price action, market rhythm and macd signal correctly.

thank you very much
  • #15,022
  • May 22, 2008 5:44pm May 22, 2008 5:44pm
Quoting nemke
hi all,

pls can u help me determine if i am right in thinking there is a possible short on the eur/usd if the price breaks the 21 ema and the macd continues the downtrend hence giving a tc signal.

if the above does occur would you take a short on the next candle or wait for the price to pull back to 21 ema, and then enter the short as per the market rhythm?

i am still new so not really sure at what point to enter.

your opinion would be great, appreciate if you could let me know if i am reading the price action, market rhythm and macd signal correctly.

thank you very much
Hi Nemke,

A TC would be if a green bar is given on the MACD. A bounce off the 21ema (which seems to be happening at present) would be a TC with keeping in with the rhythm. The reason I say a TC would be after a bounce up is because we are currently in an uptrend. This can be seen quite clearly on the weekly, daily & the 4Hr timeframes.


Remember to only consider a MACD bar complete after the 4Hr candle has closed.

Hope this helps.

Aftab
  • #15,023
  • Edited 6:18pm May 22, 2008 6:06pm | Edited 6:18pm
Aftab - thanks.

so do you mean there is a potential long position here should the price bounce up from the 21 ema as opposed to crossing under it, of course with a macd signal. see, this is where i get confused as i thought the first signal was the market rhythm which involves the price crossing above or below the 21 ema pulling back to it and than continuing the direction it was prior to the cross of the 21 ema. and with a macd signal as support.

so in the current market the price is not crossing the 21 ema but might bounce of it and go back up, however from what i have read on market rhythm the price should cross the 21 ema first before we look for the macd and determine the direction...so can we still take a long position without the price crossing the 21 ema but instead bouncing off it and is that part of the mkt rhytham i have misunderstood?

much appreciated!


thanks

i got this from the written copy of the "heart of the system"

"The price came below the 21, so what were we expecting according
to the rhythm of the market? Expect it to go back to the 21 and then come down to the
89."
  • #15,024
  • May 23, 2008 12:28am May 23, 2008 12:28am
Quoting nemke
Aftab - thanks.

so do you mean there is a potential long position here should the price bounce up from the 21 ema as opposed to crossing under it, of course with a macd signal. see, this is where i get confused as i thought the first signal was the market rhythm which involves the price crossing above or below the 21 ema pulling back to it and than continuing the direction it was prior to the cross of the 21 ema. and with a macd signal as support.

so in the current market the price is not crossing the 21 ema but might bounce of it and go back up, however from what i have read on market rhythm the price should cross the 21 ema first before we look for the macd and determine the direction...so can we still take a long position without the price crossing the 21 ema but instead bouncing off it and is that part of the mkt rhytham i have misunderstood?

much appreciated!


thanks

i got this from the written copy of the "heart of the system"

"The price came below the 21, so what were we expecting according
to the rhythm of the market? Expect it to go back to the 21 and then come down to the
89."
Hello nemke, market rhythm in a general behaviour of price as to the MA's. Now we are above 89, so what we are looking for? We are looking for price to bounce off 8 MA or 21 MA up (currently price sits on the 21, so a bounce off the 21 up) with MACD conformation TC or in this situation it maybe be BOZ.
As to the rule you are referring to, it usually comes at the end of the trend. If you see that price closed below/above 21, then we are waiting for pull back to the 21 and then a signal down (TC but it's not TC of trend, it's a TC of MACD of current move).
At present nothing really shows that price may close below 21, we are currently in a strong up trend, so when you see a closed green bar on MACD pointing up the deal is on. Just don't forget to consider other factors, R/R etc.
  • #15,025
  • May 23, 2008 12:46am May 23, 2008 12:46am
Nice collection of inside bars.
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  • #15,026
  • May 23, 2008 1:28am May 23, 2008 1:28am
Ira - thank you.
  • #15,027
  • Edited 2:06am May 23, 2008 1:53am | Edited 2:06am
EurUsd
Has 2 possibilities. Wait for some more confirmation on MACD and price action
Edit
We had a quick downmove to 21ema. Now we will have to wait for price to show what it wants to do.

GbpUsd
2 Possibilities but the market rhythm looks good for an upmove from the current price. The purple triangle is all inside bars so a lot of emotion is building up. If price goes below the purple triangle I will be looking to go short on a shortterm strategy.(10-15pips gain)

If price goes above the last 3 candles high look at 1H for a MACD TC (if 4H havent closed yet)and if confirmed enter.
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  • #15,028
  • May 23, 2008 2:27am May 23, 2008 2:27am
Euro; My intention was to open two lots short to the 21ema or low from the previous day, but that didnt work. I ended up buying four lots for +25. No loss.
  • #15,029
  • May 23, 2008 2:36am May 23, 2008 2:36am
Checkout the support for the GBP right here. We will see if it holds.
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  • #15,030
  • Edited 3:02am May 23, 2008 2:50am | Edited 3:02am
The 365 EMA and my lower trendline are at the exact same spot forming double support. If it breaks it, could see a strong move.
  • #15,031
  • May 23, 2008 3:10am May 23, 2008 3:10am
Quoting Phillip Nel
EurUsd
Has 2 possibilities. Wait for some more confirmation on MACD and price action
Edit
We had a quick downmove to 21ema. Now we will have to wait for price to show what it wants to do.

GbpUsd
2 Possibilities but the market rhythm looks good for an upmove from the current price. The purple triangle is all inside bars so a lot of emotion is building up. If price goes below the purple triangle I will be looking to go short on a shortterm strategy.(10-15pips gain)

If price goes above the last 3 candles high look at 1H for a MACD TC (if 4H havent closed yet)and if confirmed enter.
Hi Phillip

Tx, your analysis helps a lot for a guy like me struggling with the 4h system. I do appreciate all your efforts. I know what it takes (5min system!!!) but I don't think everybody realise it.

But just thanks once again.
Willem Forex recipe for success = Patience, discipline & hard work.
  • #15,032
  • May 23, 2008 3:31am May 23, 2008 3:31am
Quoting Golfer
Hi Phillip

Tx, your analysis helps a lot for a guy like me struggling with the 4h system. I do appreciate all your efforts. I know what it takes (5min system!!!) but I don't think everybody realise it.

But just thanks once again.
I agree 100% with you Willem, Phillip really is the most dedicated, hard-working person I've ever 'met', closely followed by yourself! We all owe huge amounts to both of you, so thank you too.

GBP/USD is in a very interesting place now. News due in 5 mins, my 4hr candle closed at 09:00 due to UK being BST right now (GMT+1). Tail down to 365ema and TL that was recently broken. All recent closes above 8ema. All looks good for a long but I will wait for news to react and settle then maybe drop to lower TF. No solid expectations, just anticipation - anything can happen, and it often does!!

Let's see...
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May all your pips grow into great big fruitful trees
  • #15,033
  • May 23, 2008 4:30am May 23, 2008 4:30am
Can You Explain Pls Wiyh Which Indies You Formed The Suport?
Thks & Rgds
  • #15,034
  • May 23, 2008 4:31am May 23, 2008 4:31am
Quoting Bag Lady

GBP/USD is in a very interesting place now... No solid expectations, just anticipation - anything can happen, and it often does!!

Let's see...
Very insipid reaction to news, 1.9800 is a tough barrier to break and has created a horizontal 'pivot' area in the recent weeks, being roughly midway between the famous 2.0000 and 1.9622 areas.

Price may be waiting for the 21ema to give more support and direction. Remember the 365 is there and may have been a substitute retracement point of support, thereby not necessitating the deeper pullback, but the pullback may still be a big possibility.

With bank holiday on Monday in the US and UK, people may be away for a long weekend already, or price could make some wild moves today to get into the holiday party spirit! I shall be keeping my eyes open and my trigger finger ready, but I am equally happy to do nothing if I'm not sure - if in doubt, keep out!!!
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May all your pips grow into great big fruitful trees
  • #15,035
  • May 23, 2008 4:32am May 23, 2008 4:32am
Quoting napeharm
Checkout the support for the GBP right here. We will see if it holds.

CAN YOU EXPLAIN PLS WITH HICH INDIES YOU SAW THE SUPPORT
THKS
  • #15,036
  • May 23, 2008 4:36am May 23, 2008 4:36am
Quoting vassos58
Can You Explain Pls Wiyh Which Indies You Formed The Suport?
Thks & Rgds
Hello there, do you mean my G/U chart? The dotted gold line is the 8ema, the thin brown line is the 365ema. Both of these are supportive at the moment. My trendlines come from further back and are medium-term trendlines. I tend not to use short-term TL's too much. Does this help?
Rebecca,x.

edit: oops, just noticed the question was directed at napeharm, sorry! I'll leave this post in anyway, just in case it does help anyone!!
May all your pips grow into great big fruitful trees
  • #15,037
  • May 23, 2008 4:39am May 23, 2008 4:39am
Quoting Bag Lady
Hello there, do you mean my G/U chart? The dotted gold line is the 8ema, the thin brown line is the 365ema. Both of these are supportive at the moment. My trendlines come from further back and are medium-term trendlines. I tend not to use short-term TL's too much. Does this help?
Rebecca,x.

edit: oops, just noticed the question was directed at napeharm, sorry! I'll leave this post in anyway, just in case it does help anyone!!
THKS ANYWAY
  • #15,038
  • May 23, 2008 4:55am May 23, 2008 4:55am
Quoting vassos58
CAN YOU EXPLAIN PLS WITH HICH INDIES YOU SAW THE SUPPORT
THKS

These are moving averages from 2 other times frames which i am keeping a watch on. They are from both daily and 12 hour charts, put onto a 4hr chart. I am interested in how longer time frame moving averages appear in the same place to create stronger support levels for the price. These are not part of the system, but my own interest. If you want to know more checkout my PDF on page 941, it is a research document for members.
  • #15,039
  • May 23, 2008 5:06am May 23, 2008 5:06am
Quoting napeharm
These are moving averages from 2 other times frames which i am keeping a watch on. They are from both daily and 12 hour charts, put onto a 4hr chart. I am interested in how longer time frame moving averages appear in the same place to create stronger support levels for the price. These are not part of the system, but my own interest. If you want to know more checkout my PDF on page 941, it is a research document for members.
TKS & RGDS
  • #15,040
  • Edited 6:02am May 23, 2008 5:25am | Edited 6:02am
Quoting Golfer
Hi Phillip

Tx, your analysis helps a lot for a guy like me struggling with the 4h system. I do appreciate all your efforts. I know what it takes (5min system!!!) but I don't think everybody realise it.

But just thanks once again.
Hi Phillip, I certainly second Golfers appreciation and gratitude for your hard work and dedication to assist the traders by taking such a good care for the 4hr system thread. My best wishes to you and I hope you will be well rewarded for your efforts.
It looks possible for U/D to have a sisable retracement after a good run up, and the round number 9800 might prove to be a strong resistace this time around. I am tempted to short it towards the 21EMA. Lets see what will happen. Just shorted & 9794 with 15pp SL, PT 9750. I know it s a risky trade, worth the 15 pps IMO. Have been stopped out for -15pps. I am still not too sure about the direction for the GD for the rest of today's session.
Make sure losses are small and profits are bigger!
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