4 Hour Strategy (MACD)

Markets are crazy, but what a beautiful TC on the GBPUSD on the close of the 12.00 candle today...by the way what's happening to the pour british pound?
It is so low that I am a bit scared entering with a sell order...

That's the same MACD version that I have. The problem seems to have mysteriously gone away today Maybe it was the closing and opening of MT4 that fixed it like you suggested. Very strange ...

Thanks for the information Palmer! I'll try to focus on these pairs until I feel comfortable with this system, then I may continue on to experiment with other pairs.

thanks Ekling

Palmer,

I cannot find the ADX indicator on the FXTradeBlog website. Is it on there, or do you know where to find it quickly. I would love to start testing the indicator on the 1 hour.

Thanks!

EURUSD Date 14/11/2008

tj: It's the standard Average Directional Movement Index supplied with MT4, use the default 14 setting...

Long the Swissie from about 1890 with a buy limit after the DM cross. Exited on at 25 pips, still holding two...Disregard the buy at 1850, different method....

Hm nice breakout there
Looks like the price is dropping

Oh my goodness, LOL.

I forget about the standard MT4 tools.

Thanks Palmer.

Info

Dear Phillip,

I particular appreciate you keeping this thread updated to your trades and ideas. Its good to know that we are not alone in feeling this volatility. I have been through lots of articles and books and I have never gave into the scams and after reading lots of blogs, I am glad because that's all they seem to be, just scams. Also I have been in and out of the market as a trader with no consistent success for many years. I believe that one has to truly look in the mirror and be honest with oneself to truly see what type of trader or person he/she is. I truly analyzed my trades if you could even call them that and realized I was not trading or even investing, but completely gambling and randomly entering the market by what others were saying or doing, with no money management, no proper trading or investing plan and I was doomed to fail. I have been introduced to the Forex market by a friend and I couldn't believe the potential that exists in the Forex market so I thought to give it a try just like I did my stocks and of course with no avail. So luckily I didn't lose a lot of money where I could not live with myself and that is when I decided that this is not trading so I started to educate myself. I had read many books and been on many sites and forums and blogs about people making a living as traders.

What I found out next was so mind boggling. I found out from most books and personal blogs that the main element of being a consistent trader, (the word here is consistent) that they discussed had to do with a trader's psychology. I didn't understand it at first and as I read more about this topic, and books by such author jack shwagger interviewing numerous successful traders, they all different methods of trading but one particular element which was psychological.

To understand the market as Phillip mentions, is driven by emotion and these emotions are not based on indicators or analysts but individual traders all around the world. To enter the market and think you are going to be right is no different than entering the market with your eyes closed. I believe what Phillip emphasizes about market emotion is disregarded by many individuals on this thread, especially the ones that just read the 4 page MACD pdf and start trading. The MACD signal is an EDGE that is given by certain signals, an EDGE of a higher probability trade that may occur. Its not a guarantee because no one can predict what will happen to the market but that EDGE with other confluences of events gives you an EDGE that this certain entry give you a higher probability of success and that is all the MACD signal will give you.

To be a consistent trader, the signal is only 10 percent of your arsenal. Money management, a detailed trading plan (flight plan as Phillip discusses), a discipline to follow that plan and having a positive traders mind set is the rest of the 90%.

By following your plan and the power of compounding, you will be surprised how your account multiply over and over again with just a few hundred pips a month. A few books I would recommend for any trader before trading an live accounts:
Trading in the zone by Mark Douglas
Stock market Wizards by Jack Shwager
Turtle Traders
Trade your way to financial freedom by Van K Tharp

I hope you guys can find my experience helpful and can pick out some points where it can make you a more consistent trader.

Thanks for everyone contributing on this thread

time:

I'm sure Phillip appreciates your kind words. Phillip has given us a great tool to use. Even if you don't trade the method, the high probability set-ups on the 4hr charts are very useful or compliment shorter term methods as well, hint hint. One thing that I would like to add to you post is that patience is just as vital as is consistency and money management. I've said this many times before, patience is needed for success in any trading be it forex, futures, stocks....everything. Waiting for the high probability entries does pay off. I've been picking off a few from the Swissie the past few trades but price has been testing the 21 too many times for me the past few days. My strategy for this pair is to wait for a break out above the recent high or a close below the 21, or key on the euro or yen as usual. To tell you the truth, I don't like the way either one of those looks either. In other words, I'm done with this pair (Swissie) until I see some better direction out of this area. I've gone over a month without taking a signal on the 4hr charts because the moving avergages were too constricted and the rhythm looked like a jigsaw puzzle. I waited and will wait because I know the markets aren't going anywhere.

Off to happy hour(s)....

Hello Palmer,

I couldn't agree with you more, yes, patience definitely is key, with the high probability signal and patience to wait for a good one, gives you that edge to be consistent. Phillip emphasizes on not taking every signal as well. I am also with you on the swiss trade, i took a few signals also and there was a triangle forming this week and every it broke the trend line it just went up and came right back inside and there was no strong rhythm so i took some losses but that's part of the game. Also when the market rhythm gets back to normal, i think this MACD system will definitely be a very good edge to have and this gives everyone some time to paper trade until the markets cool off. have a great weekend

dean

4H Market Rhythm 15/11/2008

Hi, I notice that you have posted your charts twice recently with no commentary. Just wondering what it is you are trying to say to other readers of the thread?

Thanks.

Info

The MACD signal is an EDGE that is given by certain signals, an EDGE of a higher probability trade that may occur. Its not a guarantee because no one can predict what will happen to the market but that EDGE with other confluences of events gives you an EDGE that this certain entry give you a higher probability of success and that is all the MACD signal will give you.

To be a consistent trader, the signal is only 10 percent of your arsenal. Money management, a detailed trading plan (flight plan as Phillip discusses), a discipline to follow that plan and having a positive traders mind set is the rest of the 90%.

Thank you Phillip for that great audio file. I hope people get to listen and read about such attachment as they are very important, even more important than the system itself. I am just like anyone else out there that tried to be a trader and thought it is so simple just knowing a system that tells you to buy and sell. I believe novice traders can speed up their learning curve if they can learn from the mistakes of previous traders. As Phillip states that, he tried all types of systems and even paid to go to a 5 day seminar where he could have just found the same information online. One can fast track those mistakes taken by others and start by doing what has worked for them. I do not understand what it is about us humans that when people advise us not to go a certain route, we still seem not to listen until we realize on our own after years of financial and emotional pain.

There are some people out there that have learned what those successful traders have learned in half the time, because it's all similar. Most if not all traders have done what Phillip, myself and many others have and read and try systems that promise you the holy grail. Please take it from me, there is no holy grail system where you can just turn your computer on and go golfing all day and make millions of dollars. If it existed, everyone would make money and the markets do not work that way. In order for one trader to win money, there has to be someone else present in the world who is losing money.

As Phillip emphasizes over and over again, that it took him 2 years until realizing how important market rhythm and price action is and not some indicators or a holy grail system. It does not have to take you 2 years to realize that but you can learn from individuals like Phillip and others who have gone that path and instead of allocating all your energy, time and money to find this holy grail system, take half that time, even 6 months to truly watch the charts and devise a plan and truly understand the psychology of trading and it won't take you 2 or 3 years to see positive results but it will take you far less time it took many others to really understand what it takes to be a successful trader.

Always remember that by complicating a situation, it just adds to the confusion. It wasn't till recently when I used to have a screen full of indicators and lines and had no idea what i am looking for, even if it was right in front of my eyes, it was hiding behind all the lines and indicators on my screen. It was then when I thought back to the books I had read and successful traders that I had talked to, that I realized one other thing they had in mind. SIMPLICITY...........everything was so simple that it was hard to believe someone can be successful by just having one indicator and 2 trendlines on their screen. But that was just it.

So I cleared all my screen, and just looked at price action. You don't even need anything on your screen for your eyes to tell you what direction flow we are in. So by adding trend lines and fibonnacci lines and MACD just made me start seeing that EDGE that I never had. It started giving me higher probability entry and exit signals on what my eyes where already viewing on screen.

I am lucky in the sense that I saw this simple path to trading without having to spend thousands on systems or seminars. I was lucky in the sense that my first few books that I read, it was about the psychology of trading and not much about the trading itself. I must admit while reading those books, I didn't think I needed that information and was in search of a book where it can tell me when to buy and when to sell. During my research, it just hit me one day that I was really lucky to have picked up those books first and not some technical system that tells you how successful you will be. Just like Phillip says, they teach you all about the parts of the car, but when you get in to drive, you have no idea how to operate it.

For those reading my posts, I don't want you to think that I am a millionaire, far from it. I actually think of myself as a novice because I am just learning this stuff but I am grateful that I am learning what I believe and see other successful traders do as well, is to train the mind and the rest will follow. As Phillip mentioned earlier, you can use any system or indicator you want, but the main underlying element will be the same regardless what you use, and that is PRICE ACTION and to recognize a trend and trading within that trend. If there is no trend now, trust me, there will be one sooner or later and that is where patience comes in. Wait for a justified trend. Agian keep it simple, your eyes will tell you whether the information you perceive on your screen is a upward or downward trend and once you establish that, all you have to do is just fine tune the price action and find a high probability point to enter your trade.

I hope my posts can be some help to the readers of this thread. As this is the only thread where no one is trying to sell me a system or membership and I would love to share any of my experiences as those who give shall receive.

dean

Thank you, time1300, for your contribution and thanks to Phil for his last mp3.
Have a good day!!