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4 Hour Strategy (MACD)

  • #1,221
  • Feb 25, 2007 7:58am Feb 25, 2007 7:58am
Thanks Phil, and all who contribute to this and your 5min method,you make it so easy to understand.

I am an absolute beginner,only placed 4trades for pennies 50/50 results so far,I look forward to learning from you.

Again BIG THANKS for sharing.
  • #1,222
  • Feb 25, 2007 8:35am Feb 25, 2007 8:35am
alcastro:

I agree with your next target at around 1.9670, the previous candle high at the trendline around Feb 14th, but the only signal is the breakout of the trendline. The MACD is still sloping up but not giving a trend-continuation signal, yet. I'm using FXDD so your chart may be a little differnet though...
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  • #1,223
  • Feb 25, 2007 8:39am Feb 25, 2007 8:39am
[quote=mparker;227534][quote=Phillip Nel;227518]1. You are absolutely right if a system uses just one indicator you can have a lot of wrong signals if you follow the rule and does not have filters.
2. That the MACD is lagging is also true. I prefer to catch the middle part of the move as that is more constant and secure.
3. The filters in the 4 Hour System in this thread is the ability to know and read the emotion of the people reflected in the price action such as morning stars, spinners. tweezer tops and bottoms, three bar head and shoulders etc etc etc.. If the development to the MACD signal is preceded by those the odds of success are great.
4. Another filter is the different Moving Averages. . . . . . . .
a. The 8EMA is the current and latest info barometer as to info just released. pay direct in relation to their interpretation of the news.
b. The 21EMA is the average of the original good news mixed with some other news before and after the original news as described in the 8EMA. As long as this average supports the direction flow the price will tend to come back to this average before going upwards again till the point is reached of fair value or counter news takes it below the 21EMA.
c. The 89SMA is the mood barometer in terms of the mood trend direction. When the price is above the 89SMA the mood is bullish and visa versa. When the price zig zag above and below the 89SMA the mood is mixed and we have a price range until there is news that will give direction to the price.
d. The 200SMA I believe is the economy barometer in general and especially on the daily graph. In the 4hour graph it tends to find support or resistance in harmony with the daily 200SMA
e. The 365EMA is a longterm emotional barometer giving more weight to the recent news events and tend to act as support/resistance when their is no other MA's closeby. Only my view.

Quote
======================================================

LOL -- your description of the markets mood sounds extremely "Italian", as i find that country's love and descriptive powers of some of the most mundane situations in the world to be expressed so "artfully" -- they (as a culture) fit my karma very closely.

Understand that I am one of those who checks the nappy constantly, often twice in a minute and throughout all of the markets (I nap a lot) so looking at the number of pips you bring forth tends to appear small to me (this is what i do to pay for two ex-wives, two children thru private high schools, their cars, their trips to europe and china and now college and NOT to forget the McIntyre sisters (one each, blonde, redhead and sultry brunette -- I have problems making up my mind about somethings obviously !) who help make life as enjoyable as can be --- no wonder i havent turned on the TV in the past year !

ive seen you describe the EUR/JPY as being near the top of its range and I must agree that its nearing the top of its Linear Regression channel and if it follows past history, is a strong candidate for a short but i feel very strongly that this will be more like its performance 2/09 - 2/14 when it essentially "double topped" causing a selloff and profit taking and resulting in the present run up ! my present indicators mirror the beginning of that week perfectly, so i will imagine that is precisely what it will do again, giving that BIG drop towards the end of next week, since current history tends to repeat itself (after all, its only people who trade these things, and if its machines, theyve been programmed by people !)

Ive seen you draw channels on some of your jpegs, and cant let a moment go by without speaking of the LRC (Linear Regression Channel) which I have been teaching for the past 6 years --- NOTHING else will show, so visually, what a trend is, what the trend WITHIN the trend is and what the trend within the trend within the trend is ! And joy of joys, its already a part of the "objects" portion of the MT4 software and needs NO introduction from outside sources !

to explain -- presently the 10 year TOP resistance for your pair is 160.54 (that will change every day, as the trend lines move UP, causing the top price to move up correspondingly) reinforced by the presence of TWO major LRC's, so UP is the definite major direction this pair is moving (and has been for 10 years) within that major UP trend, the currency cycles up and down in its never ending "run up/profit take" routine (it does it very smoothly considering and i see why you like the pair for longer term trading -- it might even satisfy my intraday trading style because there are some days with a very decent pip range contained within !) In the equities market, we would call this a "channeling" or "rolling" stock, as it simply tends to repeat its up/down trends in a very predictable manner !

your use of the current favorite EMA's is correct, if for no other reason than EVERYONE else is looking at them also, so the moving averages become a self-fullfilling prophecy --- if this pair halts a retrace at abc moving average 10 times in a row, one can assume (but watch nevertheless) that it will do it an eleventh time also !

i wont go on analyzing this pair, but i do thank you for bringing it to my attention --- its a very reliable channeler, and while i may check the nappy more often than you, this trader likes to get some sleep also !

while i think you leave "a lot on the table" as far as pippage, theyre YOUR pips to do with as you wish and NO ONE can fault your depth of research and clear manner of description --- you remind me of me at an earlier time, writing 10 page systems for all to use (still work, btw and i use them constantly) and i wish you clear sailing and many pips on your horizon.

one question --- HOW do i insert a jpeg into the body of my text as you have -- words are wonderful, but coming out of the motion picture business, I am a VISUAL person and would rather one picture save me a thousand words !

enjoy and trade well

mp


1. Thanks for the answer.
2. If you go to post 1 you will see that I only trade the EurUsd and the GbpUsd. I only gave my opinion on the EurJpy as to someone asking a question. If a pair is above the 89SMA and above the 21EMA running constantly there it is in a trend. It apply to any timeframe. Just check the EurJpy on a weekly graph and you will notice that it is above the 89SMA since 2001. The EurJpy has been in an uptrend since1999 and in a downtrend since 1979.
3. The middle of the LRC(Lin. Reg. Channel) (158.00)of the 4Hour chart since 14/01/2007 is at the 89SMA and that is exactly where I would like to go should the price came down and it is there where I expect a turnaround upwards to form a maybe double top as previously. Should it go further down to the bottom (156.00)of the LRC you will notice a 365EMA in position.

Arent we talking about the same stuff. The action of people using different indicators to define it.
  • #1,224
  • Feb 25, 2007 8:40am Feb 25, 2007 8:40am
Quoting hard1head1
Phil,

I hope I can catch on, because I really want to learn.

Jim
==============================================

Jim,

a word of encouragement from one who has traded for a VERY long time, and is still here to talk about it !

I, as well as most other manual execution traders, firmly believe that one can make a decent living in this business --- some will be on the lower end, most will be average (but average, in this case, can represent some SERIOUS money !) and a very few will excel at it !

THAT said, understand that, even with "on job training" it takes TIME --- yup, and sorry to break your bubble, but the wealth of EA's out there make pocket change compared to what one does when wearing the official rank of "trader". Unfortunately, there is NO cd, no course, no EA, no nothing that will replace what traders use as their one and only secret weapon -- EXPERIENCE !! (oh, the cd's and courses can TEACH you, but you must first become battle hardened if you want into the inner circle, and the only way to become battled hardened is through that ugly word again -- EXPERIENCE !!!

Learning to trade decently takes (on average) at least a year of application and watching (although forex DOES tend to be a bit easier than equities in that regard, although the rules remain the same !) The absolute, no questions asked book on trading (for equities, but the rules and the methods are the same) was written by Toni Turner and titled "a beginners guide to daytrading online". Ms. Turner's approach is so NON- testosterone (well that figures, doesnt it) and SO full of fact and examples, that i will bet dollars to a cops doughnuts that it will sit beside you for at least two years while you trade !

People write EA's and scripts constantly, but the best are written by those who LEARNED how to trade and then applied THAT information to automation.

The original poster of this MACD method, while I do not agree with what he leaves on the table, had obviously studied and researched over a decent time period and didnt just jump into the EA market half cocked --- IF YOU DONT KNOW HOW TO TRADE, NOTHING BUT EXPERIENCE IS GONNA TEACH IT TO YOU !

the DROP OUT RATE for ALL traders is over 97% in the first year, mostly because people think this is a "get rich quick" kind of way of life and will not spend that first year learning, as they do at school or on ANY new job !

One learns to walk before they can run and if you learn, you may just be one of the ones still around a year from now, and you then may find that making 150 pips a day is more to your liking !

Meanwhile, the easiest trades for a newb are the longer term ones AS LONG AS YOU ARE FOLLOWING THE TREND, and while I still firmly believe the original poster is giving away far too much, if only because of late entrances and exits, he shows his knowledge of the market, its swings and directions and overall movements a whole lot better than most with his experience range and is to be congratulated if for no other reason !

Im glad there are methods that work in this market, but underneath i carry a certain sadness, because the more one uses a "system", the longer it takes to learn the valuable lessons that allow you to move upwards, safely !

enjoy and trade well,

mp
  • #1,225
  • Feb 25, 2007 8:43am Feb 25, 2007 8:43am
Palmer,

I think I would wait for that trend continues signal in the MACD, however I am new and I would like to know if I am right. We may get that signal here shortly.

Jim
  • #1,226
  • Feb 25, 2007 9:49am Feb 25, 2007 9:49am
Quoting Chandra
Irusoh,
If you are using IBFX data, you should note that the data is corrupted (missing 22nd and 23rd dada) and so, your opinion may not be valid (mine too as I also uses IBFX).
-Chandra.
I am using North Finance Demo, and FXDD live.
There has been a lot of fuss here about when candle starts or ends with different dealers. I wrote a variation of MACD_H4_300 that could shift back by an hour so that it is fixed an hour earlier on some charts. Frankly I haven't seen much change in form since it also depends on data supplied by dealer, so that if one dealer has a nice round top and another looks kind of jagged, it is hard to fix that. I could release that one, see if anyone has any use for it.
I just didn't want to confuse things with too many variations of indicators. If anyone interested, please, post.
  • #1,227
  • Feb 25, 2007 9:58am Feb 25, 2007 9:58am
Irusoh, I'd be grateful for the variation.
Kind of glad to hear though that it doesn't seem to you to make much difference in signals.
But as an exercise in trusting the signals I'd like to practice with different candle start times.
You won't be diluting the system!
Thanks.
  • #1,228
  • Feb 25, 2007 10:12am Feb 25, 2007 10:12am
Quoting Palmer
alcastro:

I agree with your next target at around 1.9670, the previous candle high at the trendline around Feb 14th, but the only signal is the breakout of the trendline. The MACD is still sloping up but not giving a trend-continuation signal, yet. I'm using FXDD so your chart may be a little differnet though...
Hi Palmer, and everybody that responded to my post. I was a little surprised by the differences in the way in which I was reading the charts and what all of you were seeing. Then I discovered that my data flow had been interrupted and I was looking at the prices when they were 3-4 candles before!!!! The good thing is that my reading was right: both my trades (GBP & CAD) would have made profits. The bad news is that it had already happened when i posted my trade, but I was not aware because, as I said, my data feed had been interrupted!!

Now I have to figure out why this happened. The MT4 charts that i use are from a demo acct from MIG. Has this happened to someone around here? Does the demo accounts with this broker expire?
  • #1,229
  • Feb 25, 2007 10:59am Feb 25, 2007 10:59am
Most broker's demo accounts are only good for 30, 60, or 90 days. I have a live and demo acct with FXDD, they are good for 90 days. When the demo approaches expiration I just renew it. All the templates, custom indicators, EA's and current chart set-ups re-load exactly the way they were on the expiring demo. If you are running an EA then you have to select for it to go live on the menu bar. That's about all you have to change or do. The majority of my demo trades are based on a daily entry/exit strategy that I am still working on so keeping up with the P/L statement is not that big of a deal. I'll renew the demo acct over the weekend with no positions open. I believe Alpari has demo accts that don't expire but I prefer that the demo/live acct are the same so I don't have to learn two different trading platforms or have multiple MT4 platforms on the same machine. I did that once before and it was kinda 'messy'. I have a demo acct on my laptop and the live acct on my desktop machine.
  • #1,230
  • Feb 25, 2007 11:01am Feb 25, 2007 11:01am
MIG is very meticulous about expiring demo accounts.
They will expire in 30 days. If you want to get in just type in all new reg info it could be crap but must be different, name,email, phone etc.
I use north finance demo, which didn't ask me to register my name on their site and dosn't seem to expire, I've used it since October. It has a 1 hour difference with MIG I think where a candle starts.
  • #1,231
  • Feb 25, 2007 3:11pm Feb 25, 2007 3:11pm
Quoting Phillip Nel
1. I normally uses the 4hour and the closest high/low to the price action to draw the Fib.
2. I uses the one with MT4
3. I sometimes use Pivots but that is very often. I prefer Fib if there is no MA's to set target.
Tx, talk again tomorrow.

Willem
Willem Forex recipe for success = Patience, discipline & hard work.
  • #1,232
  • Feb 25, 2007 5:00pm Feb 25, 2007 5:00pm
Thank you for a great post,I think all of us so called newbies have a dream of making it in the forex world. I believe the fortunate ones find Forex Factory, then someone with a system they relate to .I just hope Phillip understands what a great job he is doing for a huge number of people.We are all at different levels in our walk to success in forex and our journey is made that much easier when experienced traders take the time to offer genuine advise.
I daily devour this thread and I hope in the future I might make a contribution that might help somone. This is my first post and I wish to thank all that contribute,especially Phillip.Man what a beautiful giving spirit, I hope you get blessed as well.

Cheers from Oz
Wal
  • #1,233
  • Feb 25, 2007 5:47pm Feb 25, 2007 5:47pm
Ok, my MT4 is working again. Renewed my demo with MIG. Thanks to Palmer and Irusoh for that.

It is 6:34 PM (EST). 3hrs 26 min. until next candle. I do not see potential trades on neither Euro, cable or the US/CAD (at least to enter at this moment)

Euro might form a round top. So the 10:00 PM (EST) candle will show it, and in at the 2:00AM candle if that is the case.

Cable ormed a round top, and it is already on oits way down (the MACD, not the price). Price may come down to 1.9626 or may consolidate with short candles before deciding where to go. So it is a no-trade for me (yet).

Us/CAD formed a Higher-Low against trend (under 89 MA), and it is too close to the 8 & 21 MA to let me feel compfortable. So no trade again.

What do you guys think? (hopefully thsi time I got it right!!!)
  • #1,234
  • Feb 25, 2007 6:35pm Feb 25, 2007 6:35pm
Quoting oztrader
Thank you for a great post,I think all of us so called newbies have a dream of making it in the forex world. I believe the fortunate ones find Forex Factory, then someone with a system they relate to .I just hope Phillip understands what a great job he is doing for a huge number of people.We are all at different levels in our walk to success in forex and our journey is made that much easier when experienced traders take the time to offer genuine advise.
I daily devour this thread and I hope in the future I might make a contribution that might help somone. This is my first post and I wish to thank all that contribute,especially Phillip.Man what a beautiful giving spirit, I hope you get blessed as well.

Cheers from Oz
Wal
Nicely said!
  • #1,235
  • Feb 25, 2007 6:36pm Feb 25, 2007 6:36pm
I think the EURUSD may be forming a double-top here. I'd look for some bearish divergence in the MACD which it is in the process of forming right now. Got a few candles to go though. The target would be the 21MA, stop loss....hmm. Price action is above everything right now so you may have to look at a Fib#. GBPUSD is setting up the same but the EURUSD looks like a better set-up....
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  • #1,236
  • Feb 25, 2007 6:43pm Feb 25, 2007 6:43pm
Quoting hard1head1
Phil,

I hope I can catch on, because I really want to learn.

Jim
Hi Jim!

Can relate to how you feel! Just keep learning and be patient. The skills will come. Don't force the trades (if you feel like you are swimming against a current, then something is not right). Don't know how long you have been learning, but can promise that the learning curve is longer than you expected in the begining. I too thought I could learn this market in weeks and make a fortune...14 months later, I am grateful that the pieces are falling into place and I'm finally "getting" it. Also, grateful that I didn't blow my account out in the first year and have finally turned the corner into profitablility. Take your time, practice good money management (please, don't go for a quick 5 pips w/50 on the line and 10 lots...that's a sure way to blow up an account!), study price action (avoid news trading unless you like feeling like you've just jumped out of an airplane), and stay connected to this community. Support through a group of like minded traders will make you a better trader much faster than trying it alone or switching from group to group.

Forex is simple, it just isn't always easy! Think of it as a business and make smart business decisions.

All my best wishes for your trading sucess!

Pips
  • #1,237
  • Feb 25, 2007 6:44pm Feb 25, 2007 6:44pm
Wait a minute...the MACD on the price top now on the EURUSD is higher than the MACD top at the double high. I was looking at the wrong MACD 'hump'...disregard that about the divergence...
  • #1,238
  • Feb 25, 2007 6:45pm Feb 25, 2007 6:45pm
Anyone else skeptical about the validity of market signals given when the market re-opens after the weekend and before London goes on line? Am I being too cautious? Advice and thoughts appreciated greatly!
  • #1,239
  • Feb 25, 2007 6:54pm Feb 25, 2007 6:54pm
I'm definitely skeptical... i don't evev really trust the weekday asian session let alone right after open. however, i will trade on a very good signal.

Quoting pips4uandme
Anyone else skeptical about the validity of market signals given when the market re-opens after the weekend and before London goes on line? Am I being too cautious? Advice and thoughts appreciated greatly!
DireXiv Make it happen, no one else is going to do it for you...
  • #1,240
  • Feb 25, 2007 7:14pm Feb 25, 2007 7:14pm
Everyone is boasting their success here, so here it is:

I managed to grab pips on USDJPY double-top.

sell halflot for +23
another half +32

probably could have held longer but +55 not bad for a start.
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