DislikedPhillip,
Thanx for sharing your strategy. It looks very interresting , but since forex is quite new to me.Can some1 plz tell me what 200EMA, 8SMA, etc??????Ignored
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DislikedPhillip,
Thanx for sharing your strategy. It looks very interresting , but since forex is quite new to me.Can some1 plz tell me what 200EMA, 8SMA, etc??????Ignored
DislikedWhere would you put a stop philip?
How about 1.340?
I'm looking at shorting this one soon, it still hasn't formed the round top...Ignored
DislikedHi Phillip
Firstly thanks for a great system. Extremely detailed. Shows
you've given it a great amount of thought.
I've got a question about setting stop loss.
I can't find it written in your article, except for Page 15 where you wrote
"Stoploss have to be inside the breakout otherwise it can be triggered
and then sometimes it can be very big ...."
Can you share where/how you set your stop loss? Or at least your
thought process? Should it be the last low/high (then you combine
it with money management to enter the corresponding no of lots?)
STOPLOSS
I haven’t discussed the field of stoplosses in the PDF document as it is not a matter of pattern and or standard way. There are no definite rules as to where stoplosses should be placed.
This is the major cause for people loosing money. If stops wont be hit nobody will loose money. I just feel that to little time is spend on discussing stoplosses. We very easily come up with a strategy in detail but not a stoploss strategy. I have done the same giving very exact instructions in the PDF document as to the entries and profit targets but nothing on stoplosses. The question is now----- WHY??????.
I deliberately did not give any details as to stoplosses as that depends on each individual’s profile. For some people a 20 pip possible loss is just to much to handle while other’s can handle 50 pips. The question is how much capital do you have. If you risk 50 pips how much in percentage is that of your total capital. For anyone to expect trading over a long period of time it is of essential importance to risk as little as possible of capital. The excepted rule is not more than 3%-5% of capital.
If your capital is $1000 then your stoploss should not be more than 3% of that which equal $30 or about 3 pips.. Now that does not make sense on a leverage account. That is why trading a mini account(1 pip = $1) with $1000 makes it ten times better and the 3% risk now remains 30$ but it now becomes 30 pips. Some have it that 5% on a system that gives 65+% correct deals is also acceptable. Thus we can risk between 30 and 50 pips on a mini account of $1000 capital and will have a chance to trade over an extended period of time that when we hit that 3-5 losses in a row we will not be wiped out and will still have capital to recover.
Now comes the question of where to set my stoploss when the MACD gives a signal. If your profile (3%-5% of capital) only allows you a 40 pip stoploss and the most resent low/high or two to three bars back or the trendline is more than that away you simply skip the trade. I have given a way to enter at three different levels to reduce the amount of pips risk in the PDF document. You can use that to make a 50 pip risk to about 35 pips overall. That is also done just to make sure that you stay in the business in the future.
One does not necessary have to have all your capital in your account with your broker. You might have $10000 capital of which $3000 is with your broker and the rest in your own bank account. You can than calculate your risk on $10000 as long as that money is available for the Forex. The moment you use of that money ( for personal use) your risk in terms of pips reduces as well because your capital is less.
When the MACD gives a signal it all depends how far away is the support and resistance levels. If it is more than your risk profile just let it passes by. This is how I do it. My risk profile allows for 50 pips max but I don’t like using more than 43. I don’t use equal numbers as you will notice how many times it exactly test those levels. I uses 23,28,33,38,43. Put your stops below the resent support/resistance.
The problem with most people is that they cannot afford 3 to 4 losses in a row as it will wipe them out. Any system has it bad patches. The MACD I believe can and will give 3 losses in a row sometimes. That means 150 pips could be on the cards. Can you still go on after such a loss. If not I suggest you save money till you can survive such a run of bad deals. I have made provision for 200 pips loss in a bad run.
Hope this helped in any sense.
Phillip
Sorry 2nd question. In the detailed examples of MACD,
you tend to look out for recurring patterns. Does it mean you
rarely take a signal if the MACD simply does a "V" top or "V" bottom?
An example of what I am referring to if your Figure 3 on Page 3 of your article. The fourth "L" (long) if a V bottom. It definitely doesn't qualify as a rounding bottom.
Care to elaborate, please. Many thanks in advance.Ignored
DislikedMuch like the other users I have to commend you on the quality of your report, and thank-you for sharing it. However, myself being a mostly fundamental trader I find it hard to appreciate these systems. I am a firm beleiver that it's the news which shapes the markets, not charting trends/patterns.Ignored
STOPLOSS
DislikedI've picked a nice resolution to the question of stoplloss and risk management elsewhere in this forum.
The idea is to express your max allowed loss in $, like for $5000 account 3% risk your max acceptable loss would be $150.
Now lets say you have a trade and want to put stoploss at 30 pips.
at $10 a pip on a standard account you may lose $300 on 1 lot. now divide your stoploss by 1lot loss (150/300) you come up with 0.5. you can buy 0.5 lots.
Next trade your stop loss is at 75 pips. So that's $750. Divide 150/750 you get 0.2. So you buy 0.2 lots.
This way in both cases you max loss is about $150. Of course, if stoploss is so great it gives a value below a minimum lot allowed then you need to follow Phillip's advice and bypass the trade.Ignored
DislikedThe value of "1" could not be another thing than simple, even if it is exponential (exp of 1=1). So it's ok for you.Ignored
DislikedIt did not make a round top as it came to far down.I took the trade as it came down at 1.3028 with first target at 1.3010. If you entered at 1.3030 three to four candles back your first profit taking should have been at 1.3005-1.3010 and then the rest set at breakeven.Ignored
DislikedSTOPLOSS
I haven’t discussed the field of stoplosses in the PDF document as it is not a matter of pattern and or standard way. There are no definite rules as to where stoplosses should be placed.
This is the major cause for people loosing money. If stops wont be hit nobody will loose money. I just feel that to little time is spend on discussing stoplosses. We
PhillipIgnored
DislikedI've picked a nice resolution to the question of stoplloss and risk management elsewhere in this forum.
The idea is to express your max allowed loss in $, like for $5000 account 3% risk your max acceptable loss would be $150.
Now lets say you have a trade and want to put stoploss at 30 pips.
at $10 a pip on a standard account you may lose $300 on 1 lot. now divide your stoploss by 1lot loss (150/300) you come up with 0.5. you can buy 0.5 lots.
Next trade your stop loss is at 75 pips. So that's $750. Divide 150/750 you get 0.2. So you buy 0.2 lots.
This way in both cases you max loss is about $150. Of course, if stoploss is so great it gives a value below a minimum lot allowed then you need to follow Phillip's advice and bypass the trade.Ignored
DislikedI am posting an exercise over a very difficult period and I want you to look at it and pick the deals that there is. I have picked 23 deals. I will post the deals the same time in 24 hours time and then I will post a discussion on all 23 deals 48 hours later so that you can see how I go about in doing those deals. After that you will exactly know how I do it and what you must look at and for.Ignored
DislikedJust curious if anyone is trying to play non farm payroll at 8:30? What are you thoughts and how are you planning the trade. Or are you sitting out the trade and calling it a week since it's friday?
Phillip - great exercise thanks for putting it together. I'm very curious to see how I come out in relation to your picks.Ignored