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4 Hour Strategy (MACD)

  • #41
  • Jan 29, 2007 12:14pm Jan 29, 2007 12:14pm
Quoting alcastro
Phillip,

thanks for your answer. It makes sense.

I am going through your PDF and I have found a pattern that I don't quite get, but where you seem to get a lot of pips from. For example, in the JAN 2006 chart, your 4th trade (that made +20 pips), did you consider that one a "through zero and pull back" even though it went pretty low? If that is the case which is the criteria to consider a "through zero" (if it doesn't goe past the +/- 0.0015 MACD level?
I liked the three little higher lows it made especially in the first zone below the zero and a possible breakout upwards. That is why profit was taken on the second doji as a sign of weakness and the high on 6Jan as resistance.
  • #42
  • Jan 29, 2007 12:30pm Jan 29, 2007 12:30pm
I know you concentrate on the 4HR timeframe but have you paper traded at other TF's (1HR, 15M)?
  • #43
  • Jan 29, 2007 12:38pm Jan 29, 2007 12:38pm
The reason why I took that one is that I was anticipating a stong move upwards as the price is above the 89SMA which is bullish and it was around the 21EMA where the rule says it could go bullish. The three little higher lows also did it for me. It was not a perfect setup but when I saw the two little dojis I closed out on the second Doji even before it closed. I will only do such a trade when I am able to sit live.
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  • #44
  • Jan 29, 2007 12:40pm Jan 29, 2007 12:40pm
I like the setup and rules of your system. Funny thing is I set my CCI to 41 and it basically mimics your MACD settings.

Bon success with trading.
  • #45
  • Jan 29, 2007 12:43pm Jan 29, 2007 12:43pm
Quoting pavejon
I know you concentrate on the 4HR timeframe but have you paper traded at other TF's (1HR, 15M)?
Yes the 1hour. But there only a few setups I will look at and only if I can trade live. I havent done any testing on the 1hour just had a look. Seems to be to chaotic.
  • #46
  • Jan 29, 2007 1:57pm Jan 29, 2007 1:57pm
Hi Phil,
would you consider today's cable (around the time you took that EURUSD trade) also too "MA's crowded" ? it seems all MA's (but 365EMA) are quite tight. Also it seems, that the setup of 8/21/89EMA is not according that setup you use on 5 min TF. But there is perfect example in january 17.

I am starting to really like this.
Endy
  • #47
  • Jan 29, 2007 2:11pm Jan 29, 2007 2:11pm
Quoting endy
Hi Phil,
would you consider today's cable (around the time you took that EURUSD trade) also too "MA's crowded" ? it seems all MA's (but 365EMA) are quite tight. Also it seems, that the setup of 8/21/89EMA is not according that setup you use on 5 min TF. But there is perfect example in january 17.

I am starting to really like this.
Endy
You are absolutely right. Remember also that the price has broken down through the 89SMA and a pullback to the 21EMA is the rule. But the MA's is to crowded so I will wait for a breakout first and then confirmation on the MACD as we are in a little consolidation phase. If the price moves away from the 21EMA coming down and the MACD shows our trend continue setup(move towards zero and then turn away) one can consider entering with first target 1.9500 and second one 365EMA. Also watch the trendline as from 8Jan. We are at support. Patients is the name of the game.
  • #48
  • Edited 2:34pm Jan 29, 2007 2:19pm | Edited 2:34pm
This is what i will wait for on the GbpUsd. Both setups according to the PDF.
If you wanted to take the trendline on as support with a rising MACD you should have done it 3 candles ago at 1.9550 which were a good overall support setup with first target 1.9600 and second 89SMA. This then becomes a high probability trade as you can set your stoploss close to your entry below the trendline with risk about 20-25 pips.
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  • #49
  • Edited 7:04pm Jan 29, 2007 7:01pm | Edited 7:04pm
Hi,
Thanks a lot for sharing ur experience ,that was very interested
i have some comments about this system and i wish u accept it

1- The MACD Patterens are very strong and Great you even can Trade with it Only !!!! no comments at all ...i valued a lot that u didn't Include zero line crossing cos this is very false signal .

2-The MACD Patterens need filters for best entry's ,TP & SL ... and u use MA's that i found it too wake it's always cut ur profit
you have 2 Idea's :
a) working with MACD Patterens only ...... long signal = entry & short signal = close and reverse ...or any of MM arts
b)useing Weekly Pivot for best Entries and best Targets (Check the acctachments)

3- I think that u should take a look on Gbp/Jpy and Eur/Jpy ,Good pips waiting us there

Status: Deeeeep Backtesting mode

Have a great day/night
~Walid
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  • #50
  • Jan 29, 2007 7:17pm Jan 29, 2007 7:17pm
I'm definietly interested.... I used the MACD for awhile, but moved away from it lately on other systems I'm testing. I walked through you trades and really do see what you need for entry most of the time, and the exits look quite good as well.

Thank you very much for showing us this in such great detail!

I do have one question - It seems as if sometimes when I would start to see a round and take the trade, it would possibly turn as a heisitation and continue on as a continuation signal. How do you combat that?

Thanks!
DireXiv Make it happen, no one else is going to do it for you...
  • #51
  • Jan 29, 2007 8:48pm Jan 29, 2007 8:48pm
Here's a trade a took last night. It was bed time for me so I used a 50pip stoploss and a 50pip target. When I woke up, price hardly changed but everything still looked good so I left it open while I went to work. When I came home, I found I was plus 50pips in my demo account. Looks like a good system Phil. Hope this post helps someone out in seeing trade setups!
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  • #52
  • Jan 29, 2007 8:50pm Jan 29, 2007 8:50pm
I'll be looking to see what happens around the zero line of the GBP/USD now.
  • #53
  • Jan 29, 2007 11:40pm Jan 29, 2007 11:40pm
Tx Phillip, well documented Method and great talk through on trades, I will keep un close eye on the development thereof, currently busy with the final fwd testing of something else.
  • #54
  • Jan 30, 2007 8:55am Jan 30, 2007 8:55am
Hi Phillip,

I have some questions regarding which trades to choose. For example, in the chart (GBP/USD) in post #48 , there was a lower high just after the dotted line that is betwen Jan11 and Jan 15. Would you have taken the short trade (without the benefit of hindsight)? Why yes or why not?
The same formation (a lower high) appeared again just after Jan 18. Same question.

Then, around Jan 25, a double bottom formed. Would you have taken the long trade?

AS you can see, in the first two trades, if you have gone for them it would have resulted in a loss, and the third one-the double bottom, is still uncertain on where it will go.

My point is that the MACD tends to generate many opportunities to trade but if you take them all you would end up with more losses than the percentage you reported. I guess I am looking at this in the wrong way and would appreciate if you can let me know what is what I am not seeing in the three patterns that I refered to above.

Thanks,

AC
  • #55
  • Jan 30, 2007 9:14am Jan 30, 2007 9:14am
Hello Phillip,

Just thinking more about your system and wondering if news affects your system at all? By looking at the 4hr charts, you cover a lot of time and times when some major news comes out. So on the days news comes out, would you stay out of trades? Increase or decrease your stoplosses and pip targets? Tomorrow the US interest rate statement comes out, so if there was a good trade setup happening tonight on one of the pairs would you want to take it or skip it and wait for the news tomorrow?

Thanks!

p.s. So far I have used your system for two demo trades and gotten 50 and 25pips. Currently have some other trades open waiting to see how they turn out. Also, testing it on the USD/JPY pair to see how that works. Looks good so far. If anyone else is testing other pairs, please post your findings!
  • #56
  • Jan 30, 2007 9:35am Jan 30, 2007 9:35am
Quoting Walid Elhelw
Hi,
Thanks a lot for sharing ur experience ,that was very interested
i have some comments about this system and i wish u accept it

1- The MACD Patterens are very strong and Great you even can Trade with it Only !!!! no comments at all ...i valued a lot that u didn't Include zero line crossing cos this is very false signal .

2-The MACD Patterens need filters for best entry's ,TP & SL ... and u use MA's that i found it too wake it's always cut ur profit
you have 2 Idea's :
a) working with MACD Patterens only ...... long signal = entry & short signal = close and reverse ...or any of MM arts
b)useing Weekly Pivot for best Entries and best Targets (Check the acctachments)

3- I think that u should take a look on Gbp/Jpy and Eur/Jpy ,Good pips waiting us there

Status: Deeeeep Backtesting mode

Have a great day/night
~Walid

I don't really use pivots unless there is no indicator to set my profit target to and that havent happend yet. As to entry one can get to much involved in indicators and again does not know when to pull the trigger as out of three indicators one is in contradiction to the other and it becomes more confusing. I like it simple. The MACD tells me when to pull the trigger. After that I can focus on the management of the deal according to my plan. If there is really nothing I can set my profit target to I go fishing and I can tell you that does not happen often.
  • #57
  • Jan 30, 2007 9:49am Jan 30, 2007 9:49am
Quoting DireXiv
I'm definietly interested.... I used the MACD for awhile, but moved away from it lately on other systems I'm testing. I walked through you trades and really do see what you need for entry most of the time, and the exits look quite good as well.

Thank you very much for showing us this in such great detail!

I do have one question - It seems as if sometimes when I would start to see a round and take the trade, it would possibly turn as a heisitation and continue on as a continuation signal. How do you combat that?

Thanks!
I am glad you asked that question. If you take the round top/bottom against the trend you must know that you profit target is going to be to the 21EMA and if there is not enough room you must wait for the next signal. Lets take todays signal on the EurUsd. It give a nice rond top. Where are R/S. It found it against the trendline as well as the 89SMA. We had a shooting star????? which is in doubt by me. So I am not sure as to the direction really. We are around to many MA's. I will rather wait for the true direction. Patients is very important.
Should it goes below zero that I will take on.
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  • #58
  • Jan 30, 2007 9:54am Jan 30, 2007 9:54am
Regarding how this system works on yen pairs, my humble opinion is, that given the nature of yen pairs (that is, carry trades), where in recent times almost everyone was shorting yen, I would use this method for entry only when shorting yen, due to its prevailing trend. Note the "big" appreciation of yen (for example in the biginning of january this year). So after those intensive slumps in yen pairs, it looks fine to go short yen again, when MACD shows entry. For many of those corrections, they stopped at one of MA's which Phil is showing in his system, also nice sign.
Anyway, at the moment, it seems quite risky to short yen, or do it with pretty tight stops..
  • #59
  • Jan 30, 2007 10:01am Jan 30, 2007 10:01am
Quoting endy
Regarding how this system works on yen pairs, my humble opinion is, that given the nature of yen pairs (that is, carry trades), where in recent times almost everyone was shorting yen, I would use this method for entry only when shorting yen, due to its prevailing trend. Note the "big" appreciation of yen (for example in the biginning of january this year). So after those intensive slumps in yen pairs, it looks fine to go short yen again, when MACD shows entry. For many of those corrections, they stopped at one of MA's which Phil is showing in his system, also nice sign.
Anyway, at the moment, it seems quite risky to short yen, or do it with pretty tight stops..

Nice input Endy...thanks!
  • #60
  • Jan 30, 2007 10:51am Jan 30, 2007 10:51am
Quoting alcastro
Hi Phillip,

I have some questions regarding which trades to choose. For example, in the chart (GBP/USD) in post #48 , there was a lower high just after the dotted line that is betwen Jan11 and Jan 15. Would you have taken the short trade (without the benefit of hindsight)? Why yes or why not?
The same formation (a lower high) appeared again just after Jan 18. Same question.

Then, around Jan 25, a double bottom formed. Would you have taken the long trade?

AS you can see, in the first two trades, if you have gone for them it would have resulted in a loss, and the third one-the double bottom, is still uncertain on where it will go.

My point is that the MACD tends to generate many opportunities to trade but if you take them all you would end up with more losses than the percentage you reported. I guess I am looking at this in the wrong way and would appreciate if you can let me know what is what I am not seeing in the three patterns that I refered to above.

Thanks,

AC

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