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4 Hour Strategy (MACD)

  • #17,681
  • Nov 3, 2008 4:47pm Nov 3, 2008 4:47pm
Quoting baco75
Hi Phil,

it is amazing how well all the rules of this system apply to the daily graph.
Why don't we take in consideration the trend on that graph? For instance, the huge doji inside the channel on the 30th of october could have been considered a strong signal for going short the next day or am I wrong?
I understand that trading daily gives unacceptable risks in terms of stoplosses, but it can give a hint... What do you think?
baco:

Regardless of what timeframe you (we) trade it's always a good idea to check the next higher timeframe to get a handle on the longer term trend. You'll find over time that the daily and weekly support/resistance/channels etc. provide longer term profit targets or areas to cosider for price projections when the 4hr rhythm is strong. There's no harm in plotting those lines on the daily then changing your chart time back to the 4hr so those 'area' are visually there for you on the charts...
  • #17,682
  • Nov 4, 2008 12:41am Nov 4, 2008 12:41am
Quoting Palmer
baco:

Regardless of what timeframe you (we) trade it's always a good idea to check the next higher timeframe to get a handle on the longer term trend. You'll find over time that the daily and weekly support/resistance/channels etc. provide longer term profit targets or areas to cosider for price projections when the 4hr rhythm is strong. There's no harm in plotting those lines on the daily then changing your chart time back to the 4hr so those 'area' are visually there for you on the charts...
Great hint! I was wondering how you managed to tranfer those lines into the 4H chart. Thank you Palmer!
  • #17,683
  • Nov 4, 2008 4:10am Nov 4, 2008 4:10am
I'm seeing something interesting on USD/JPY.
It has squeeezed into an ascending triangle and waiting for a break-out is the way to go. it looks more like it might break out on the down side because of the MACD bearish cross-over, and also the lower high pattern on MACD.
Does anybody in the house have a different opinion?
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  • #17,684
  • Edited 5:12am Nov 4, 2008 5:00am | Edited 5:12am
Quoting Laja1881
I'm seeing something interesting on USD/JPY.
It has squeeezed into an ascending triangle and waiting for a break-out is the way to go. it looks more like it might break out on the down side because of the MACD bearish cross-over, and also the lower high pattern on MACD.
Does anybody in the house have a different opinion?
price is going to break the top TL and also it is above the 89. so i think macd can break its TL to upside and results an upmove.on the other side if u look at the chart in daily TF the down move is also possible.
anyway ,in each condition we could expect a huge movment after 2 3 candles .i'll wait till the price shows its way
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  • #17,685
  • Nov 4, 2008 7:03am Nov 4, 2008 7:03am
Looks like I missed the Yen long I was thinking about. Here's another example of how to use the ADX on the 1hr...The 4hr came back to the 21 for a TC (vertical line) and the 1hr ADX (vertical line same time) has the +DM crossing above he -DM and staying there showing a strong move to the upside. This would have kept you out of the short trade.

For the new faces: Be sure to get the 4hr rhythm principles down before going down to the 1hr charts to look for an early entry. You can find that info on the website. The 1hr charts are more aggressive and and the 4hr is really all you need to trade this method. This is just extra info for probable early entries per a 4hr signal....
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  • #17,686
  • Nov 4, 2008 7:48am Nov 4, 2008 7:48am
Hmm EUR USD H1 Chart shows buy...

Quoting Palmer
Looks like I missed the Yen long I was thinking about. Here's another example of how to use the ADX on the 1hr...The 4hr came back to the 21 for a TC (vertical line) and the 1hr ADX (vertical line same time) has the +DM crossing above he -DM and staying there showing a strong move to the upside. This would have kept you out of the short trade.

For the new faces: Be sure to get the 4hr rhythm principles down before going down to the 1hr charts to look for an early entry. You can find that info on the website. The 1hr charts are more aggressive and and the 4hr is really all you need to trade this method. This is just extra info for probable early entries per a 4hr signal....
  • #17,687
  • Nov 4, 2008 9:02am Nov 4, 2008 9:02am
Quoting Phillip Nel
A spinner after a nice run allways shows indecision as to the continuation of the current move which could be a good signal if confirmed by other candles also indicating a possible halt like the doji we had just before the spinner. That makes it a high probability trade if it is in flow with the rhythm like we had. Price went above the 21ema, then pulled back showing indecision to take it below the 21ema therefore it was a high probability trade according to the rules back to the 89sma. Only my opinion.
Your words actually sparked me into looking at the possibilities of a power candle(or bar continuation? w/e you called that) after a doji followed by a spinner or vice versa. Ive only looked at the same direction of these 2 candle patterns. If the doji and spinner are bearish, then the possibility of a bearish bar continuation candle is quite high (purely emphirical, no intensive backtest done)

It adds a lot of value to the MACd confirmation. However, in most instances (again, based on observations only), we could trade solely based on these confirmations and still make a couple of pips in accordance to the market ryhtym. What do you all think?
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  • #17,688
  • Edited 1:04pm Nov 4, 2008 9:43am | Edited 1:04pm
After Palmer talking about the UsdJpy I started to look at it and liked the support on the 89sma and 21ema

Long after a morning star formed on the 89sma and the 21ema.

Long 99.28
SL 98.68
TP 101.00 near the 200sma

Edit 1
Closed 50% for +50pips just now. Set remainder on BE

Edit 2
Set stoploss on remainder at 99.45

Edit 3
Set stoploss to 99.80 on remainder

Edit 4
Set remainder stoploss at 100.00

Edit 4
Stopped out at 100.00

Total gain (50+72)/2 = +61 pips
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  • #17,689
  • Nov 4, 2008 9:48am Nov 4, 2008 9:48am
Quoting million
Phillip, would you explain how did you split the SL. Don`t we need a retracement in the candle after the signal-candle to do that? (Because there was no retracement in that last trade.)
Instead of using a 60pip stoploss I will sell 50% at -30pips and the rest at
-60pips giving an avergae loss of 45pips. Sometimes the -30 will be triggered but the -60 will hold and give me some +pips. This is to help with a large candle to split the stoploss in 2 parts.
  • #17,690
  • Nov 4, 2008 10:26am Nov 4, 2008 10:26am
Quoting Nigel
Your words actually sparked me into looking at the possibilities of a power candle(or bar continuation? w/e you called that) after a doji followed by a spinner or vice versa. Ive only looked at the same direction of these 2 candle patterns. If the doji and spinner are bearish, then the possibility of a bearish bar continuation candle is quite high (purely emphirical, no intensive backtest done)

It adds a lot of value to the MACd confirmation. However, in most instances (again, based on observations only), we could trade solely based on these confirmations and still make a couple of pips in accordance to the market ryhtym. What do you all think?
If you know the rhythm you will know how important these type of candle formations are and especially the place and position they occur.
Look at the trade I did on the UsdJpy using the morning star that was formed off the 89sma and the 21ema as the emotional part, the pullback and support on the 89sma as the rhythm part and the MACD TC signal as a final confirmation if there was still some doubt. I would have taken that trade without the MACD as everything was in place.
  • #17,691
  • Nov 4, 2008 11:23am Nov 4, 2008 11:23am
Took this on slightly early, but worked out well. Could have waited for the 4H, but there was a high probability that the SL would be huge (and it was). I like the candles formed on my chart. Looked like an Abandon Baby formation or Evening Doji Star. Both are highly reliable bearish reversal patterns.
Should have let the remaining profit run more, but again had work to do so could not watch it. I did set a stop that would put me in profit anyway in the second unit.

Watching cable and eu to see how they react to moving through 89 sma and 21 ema. Would like to see them retest these levels and then a signal to get long. We are above that trendline that gave resistance yesterday.
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  • #17,692
  • Nov 4, 2008 11:24am Nov 4, 2008 11:24am
Quoting FX is cool
Hmm EUR USD H1 Chart shows buy...
FX...I was referring to the USDJPY, forgot to mention that, thanks....
  • #17,693
  • Nov 4, 2008 11:49am Nov 4, 2008 11:49am
Quoting neilbuc
Took this on slightly early, but worked out well. Could have waited for the 4H, but there was a high probability that the SL would be huge (and it was). I like the candles formed on my chart. Looked like an Abandon Baby formation or Evening Doji Star. Both are highly reliable bearish reversal patterns.
Should have let the remaining profit run more, but again had work to do so could not watch it. I did set a stop that would put me in profit anyway in the second unit.

Watching cable and eu to see how they react to moving through 89 sma and 21 ema. Would like to see them retest these levels and then a signal to get long. We are above that trendline that gave resistance yesterday.
Evening star off the 21ema with MACD zerobreak signal. Vey high probability trade. Well done. The pullback to the 21ema was nice and with smooth rhythm.
  • #17,694
  • Nov 4, 2008 12:19pm Nov 4, 2008 12:19pm
Quoting neilbuc
Took this on slightly early, but worked out well. Could have waited for the 4H, but there was a high probability that the SL would be huge (and it was). I like the candles formed on my chart. Looked like an Abandon Baby formation or Evening Doji Star. Both are highly reliable bearish reversal patterns.
Should have let the remaining profit run more, but again had work to do so could not watch it. I did set a stop that would put me in profit anyway in the second unit.

Watching cable and eu to see how they react to moving through 89 sma and 21 ema. Would like to see them retest these levels and then a signal to get long. We are above that trendline that gave resistance yesterday.
good trade , there was also a TL resisting the price ,i was watching it but again ,the big stoploss for me
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  • #17,695
  • Nov 4, 2008 12:23pm Nov 4, 2008 12:23pm
Quoting Phillip Nel
After Palmer talking about the UsdJpy I started to look at it and liked the support on the 89sma and 21ema

Long after a morning star formed on the 89sma and the 21ema.

Long 99.28
SL 98.68
TP 101.00 near the 200sma

Edit 1
Closed 50% for +50pips just now. Set remainder on BE

Edit 2
Set stoploss on remainder at 99.45

Edit 3
Set stoploss to 99.80 on remainder

Edit 4
Set remainder stoploss at 100.00
would u please show us how and when u r moving ur stoploss?
thx
  • #17,696
  • Nov 4, 2008 12:34pm Nov 4, 2008 12:34pm
Quoting bshadroo
good trade , there was also a TL resisting the price ,i was watching it but again ,the big stoploss for me
I see that the stoploss sizes is keeping people from trading. See if your broker allows you to trade with less leverage and reduce the leverage till your stoploss risk is not more than 2% of your capital and then you will be fine.
  • #17,697
  • Nov 4, 2008 12:39pm Nov 4, 2008 12:39pm
Quoting Phillip Nel
I see that the stoploss sizes is keeping people from trading. See if your broker allows you to trade with less leverage and reduce the leverage till your stoploss risk is not more than 2% of your capital and then you will be fine.
yes ,it is a problem thease days.i am trading with minilots and my broker dont allow me to trade micro .so there is no way to trade H1/H4 i should wait for normal market condition,but no problem ,im doing well with ur M5 system thease days
  • #17,698
  • Nov 4, 2008 12:43pm Nov 4, 2008 12:43pm
Quoting bshadroo
would u please show us how and when u r moving ur stoploss?
thx
I just try to keep it a save distance away. At the moment I keep it 50pips away till it gets closer to my profit target then I change to 30pips. I dont do it on a fix sort of rules.
  • #17,699
  • Nov 4, 2008 12:45pm Nov 4, 2008 12:45pm
Quoting bshadroo
yes ,it is a problem thease days.i am trading with minilots and my broker dont allow me to trade micro .so there is no way to trade H1/H4 i should wait for normal market condition,but no problem ,im doing well with ur M5 system thease days

Cant you change the leverage from say 50:1 to 2:1, or 1:1 or 5:1 etc. that will reduce your risk.
  • #17,700
  • Nov 4, 2008 12:46pm Nov 4, 2008 12:46pm
I am not here to advertise, because I certainly don't get paid for it, but I use Oanda. As with all brokers, Oanda has its ups and downs. But you get to trade a "unit" size, so you can trade almost any specific dollar amount that is allowed with your account size.

Sometimes, to try things out, I trade with a stop loss of 10 cents, even if the stop loss is 100 pips.

With that said, I am just not getting it down. Nothing Phillip has done wrong, his method is great and his teaching and time is extradoniary. I just probably don't have what it takes to trade, but since I live in sh***y Kansas City, and I have nothing to really live for, I have no reason to quit trying to learn.
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