4 Hour Strategy (MACD)

Quoting Phillip Nel

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Quoting Ritchie Mann

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It is my humble opinion that all the systems based on fixed numbers (like this one) sooner or later are doomed to fail. The market is not anymore what has been 2 years ago and will never be again.
The easiest way to make money in this moment is to find a good entry (based on this system or any other) and let the winners run. I'm referring only to EURUSD and cable, I don't look at other currencies. Nobody expected these movements and I don't think that they will go away so easy as the beginners expect.

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Quoting Palmer

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There are periods or scenarios where every method, EA, system, or roll of the dice fails. That's why it's important for the individual trader to recognize the fundamentals of the markets and know when it's time to disable an EA or let the market wash out and not trade. The only reason that a solid method is 'doomed to fail' is because the trader does not have the patience to wait for a high probability entry. Limiting yourself to two currencies, and be successful, should make you more disciplined to wait for these entries. I've narrowed it down to just the EU about 80% of the time. If you have only one method that you follow because of your 'life' schedule and you can only trade sparingly, fine. That's where the discipline comes in. If a method is failing on a certain timeframe the trader must adapt as well and use his/her other methods on other timeframes to suit that market. Again, the only reason why a method such as this one fails is because the individual trader lets it happen. A few losing trades in a row or a bad week or month does not equal a doomed method.

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Quoting Ritchie Mann

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For me a system is a set of rules regarding the entries and the exits. The system presented in this topic is doomed to fail because you cannot find any more entries based on the rules.

Now, the rythms and the feelings are not rules. They are good excuses.
Did you have a loss? It is because you didn't feel the rythm or you didn't wait enough for the rythm to come to you.

I think that those who make money using this system actually are discretionary traders which, after studying the market for a few years, obtained a certain feeling which they can't put in words or on an indicator. So Phillip and you and others on this topic will make money at forex regardless of the rules of this system.

Did I confuse everybody enough?

Some ideas on this topic are really good. But I consider the system alone as unreliable. Anyway, I expect to be contradicted by the future evolution of the prices.

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Quoting Phillip Nel

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I just worked through the trades since 1Aug2008 and if you used a stoploss of 100 to 120Max you could have made 2500 pips max. But lets say you closed the trades 50% short of the max for each trade you would have made 1250 pips for the 3months.

This now close the matter for me as far as it is that this system does still give good signals for those that have the nerves to take a 100-120 pips stoploss at the current volatility. It may change back to normal size candles in the future but only time will tell.

IT HAS BEEN PROVED TO BE A FALSE STATEMENT THAT THIS SYSTEM DOES NOT GIVE ENTRIES ANYMORE.

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Quoting baco75

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Hi Phil,

I do believe that your system works, but the last two pdf's you posted have some trades that I do not quite understand. I want to make clear that I am not criticizing the system but I am trying to give my contribution to make it more understandable to everyone out there who has the right attitude towards learning it, the others are welcome to follow other threads and systems..
File Sept-Okt 4H MACD TC Trades question.pdf
graph on pag. 1: the sixth trade was a wrong trade, wasn't it?

Sorry. Trade No 6 and 7 was wrong trades. The red circles did not print in the PDF. I tried to take TC regardless of rhythm just to show by trading just TC patterns and the MACD confirming you will make money

graph on pag. 4: on the first three trades you went long..but we are below the 89 and there is not a real trend; the price is ranging. Are these pure MACD entries regardless of rhythm?

The price went above the 21ema and then pulled back indicating the possibility of the rule that it might go to the 89sma. Therefore the long decision after a TC even if it was below the 89sma. Todays EurUsd trade was the same rule being applied as part of the rhythm.

Aug-Oct trades 4H MACD.pdf
graph on pag. 2: how do you manage to take profit on just one candle which is the one that gives the TC?

That was a wrong trade with 109 loss

graph on pag. 5: is it a loss?

Yes. that was a loss

There may be more trades that I don't understand but if you can explain these I think i'll understand the system much better!
Thank you very much for your time and patience!

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Quoting Ritchie Mann

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Phillip, you're right. But at the beginning of august nobody knew what kind of movements will follow. And those unusual movements of august are small compared with the movements of october.

Of course the MACD will always give signals. There's no shortage of signals, just you can't know beforehand what kind of movement you should expect so you can adjust your SL acordingly.

Stoploss should be above/below the signal candle so the stoploss is allways known. It is up to the trader to adjust his position size to accomodate the stoploss in terms of % of capital he wants to risk.

You recognize that it is a harder to find good signals and you had to look at other indicators, time frames or systems. With your knowledge of the market you win always because the indicators lose their importance when somebody starts to feel the rythm.

I dont look at other indicators. I uses a 5min system that is in harmony with the 4H MACD rhythm and signals. I will not use a stop greater than 50pips on the 4Hour. The system still give good signals as shown in the pdf documents. My aim is 300pips per month on the EurUsd and the GbpUsd combined. Even with the volatility I will still get that even if it means only 3-4 trades per month. I will wait for those setups and take them. Even if I can get that in one trade per month I will still be happy.

I still think that the rythm you've taught still works simply because it is independent of the size of the candle and current volatility. But the MACD(5,13) seems too late, the EMA21 as target is way too far and sometimes EMA8 too.

If the motion gets away from the 8ema and the 21ema and I am not on board it means the boat has been missed. The system give you a chance to get in even on a fast move. One cannot get every move. So if the pull away is fast and you missed a signal or two you will most definitely watch it from the sideline using this sytem.

PS. I trade mostly cable which has the same rythm as the Euro.

PS2. You should agree that the initial rules where designed for a market which moved 30 pips a day, as it has been for Euro exactly one year ago. I went to sleep and after 8 hours neither the BE nor the TP have been touched.

The initial rules was never designed for a daily 30pip move. It is nowhere documented like that. The average daily pips for 2000=108, 2004=116, 2005=103, 2006=90, 2007= 72 and 2008=142 so far. If you leave out the Asian session the average even gets bigger. The movements of the EurUsd is in beats of 60 and the daily range was normally between 1-2 beats.(60-120pips). As from June this year it changed due to an economic crisis. If it stays like this then this system is doomed on the 4Hour timeframe due to the fact that stoplosses is too big. But then we change to the 1Hour and it is good again. If the 1Hour gets to big we change to 15min etc. because the principals stays the same.

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Quoting edeyj999

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Phillip,

I want to back you up on this. I have traded both your 5 minute and 4 hour systems during October. I have used the 1 hour timeframe for signals when the market has been particularly volatile and it has worked.

I have had a 66% success rate with the 5 minute system and a 75% success rate with the 4 hour. My account is up by 27% in value during this month alone. This during a period when my stocks have been diving (what is your secret with stocks?).

So, thank you for your teachings and two very good systems.

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