4 Hour Strategy (MACD)

Here's the pivot indicator I use. I believe it calculates from the close of the day. You just need to enter the GMT shift for your broker....

Hi,

I synchronized my chart to an mt4 server gmt+2 but I still see big differences between my chart and the chart used in the weekly wrap-ups.
are the chart used in the wrap-ups based on gmt+2?
this is crucial to be able to follow Phillip explanations

tnx

Hello guys, hello Phillip! I've been following this thread for some time now and I must say this is the best strategy I've found so far and it fits me perfectly. So many thanks to Phillip for all the time and energy invested into this thread as well as to all the people that contribute on a daily basis.

I've tried a simple fibo retracement strategy, Vegas' strategy and they all work, but they don't have the consistency this MACD 4H strategy has, especially in turbulent times like these.

P.S.: I'm short on GBP/USD (on demo).
entry @ 1.4912
profit 1 @ around 8-21 EMAs (with a T/P @ 1.4850 just in case the net goes down again)
stoploss @ 1.4965

Let's see how it turns out...
http://img300.imageshack.us/img300/7911/1231232lh2.gif

Thank you for the indicator, also how do I find out what is my brokers GMT shift and how do i adjust it as you mentioned?

Also palmer, I do not see any support lines, all it displays is the pivot line and the 3 resistance line? am i seeing this right

Marubozu: If the profit target is 'around' the 8/21 and if the 8/21 is 30 or 40 pips away, remember, if you have 20 to 25 pips in the bank but the 8/21 area is still 15 pips away....we all hate to see a profit turn into a loss. So, if you went in with say 1.0 lots, take 0.5 out at 20 pips and monitor the other 0.5 to b/e or trail it. If it runs in your direction big time, don't start thinking that 'if only I didn't take out that 0.5 lot I could have made $$$ more....' It's about the pips and being consistent. Glad it's all working out for you, Phillip appreciates it.

time: here's what my 1hr EU looks like right now. You may have to adjust some of the SR line color depending on what your background color is and wht the SR and pivot line colors are set to. So, you'll have to adjust the preferences of the indicator when you drop it on the chart and click on the tabs of the indicator. Your broker's server time...you'll have to email them and ask them what their GMT shift is.

Looking at the current cable situation now. It is giving a possible TC after price found resistance @ 365MA in the 1hr TF while 4hr TF is has also found resistance @ 89MA, both around 1.4980. There is also two doji before it. So is it worth taking the risk if the sl <50 when candle closes.....hhmmmm

Luckily I was around when it hit the 8 EMA and I closed 50% of my position for 33 pips profit and moved the rest to B/E. It hit my stoploss and climbed to 1.4970. So maybe not the best entry, but at least I kept those pips.

Took a chance with the cable trade as MACD gave a TC signal and a good confirming candle after two doji

Entry 1.4932
SL 1.4912
TP @ 1.4980 & 1.5022

Yeah, I was thinking of entering the trade too, but I don't like the looks of it. I still think it's going down.

Got stopped out. Maybe should have look at the tail from the previous candle. A good learning point, can't win every trade.

Update
After hitting the SL, price went up to the 1st target 1.4980. At least it was a winning trade. Just SL wasn't large enough to accommodate the price fluctuation. Guess all trader had a few of "if only i set larger SL".....

Hi Palmer and everyone, I have been following the thread for 4 months, still trying to learn. Two questions: When I take a MACD signal and if Stoploss over 50 pip, say 100, I modify my lot size according to my 2% of the capital. when sL is over 50, does the trade still a high probability trade (considering other system conditions are good, price action, market rhtym, market motion etc.).
second question: what are your SL, TP1 and TP2 strategies? How can you decide "TP1 area" and "TP2 time". Is TP1 planned before entry?
I can watch every 4h candle to see if MACD gives signal or not. And if signal comes I don't miss the trigger (even sleep time). But i can't watch it live during 08:00 and 12:00 candles because of my job's responsibilitiy ,if i open a trade. What do you advise in these situations?
Thank you.

Info

The GBP/USD seems like it might be setting up for a good trade off the top of a triangle. The 1hr shows a break above the line and a return to it. The only concern I have about the setup is that the price is hovering right around 1.5000, which I believe to be a significant pyschological price if not a genuine level of support and resistance. Does anyone have any thoughts on the pair?

just thinking aloud....

Bounce off upper monthly trendline and 8 EMA on the 1H and support on 365 EMA on 4H. Retesting 1.34 level again maybe but what will come after that, a drop or consolidation?

anyone going long on gbp usd on the 00:00 candle

mgokhank: Phillip has stressed many time to not trade by the MACD alone. When I first started looking at this method I put a lot of focus on the MACD patterns and let the moving averages be a secondary signal. Now, it's the other way around. I put the majority of my analysis towards what are the moving averages telling me, where are the s/r lines, channels, and then what does the MACD look like. I watch it but don't trade by it. When the ryhthm is flowing well, and this can be over a period of weeks, where price action comes back down to the 21 and then continues in the original direction several times, and when (if) price breaks the 21 and closes on the other side and makes it to the 89 and stalls, that's rhythm. That can take a long time to see in the chart. You'll see how price reacts to the moving averages, channels, trendlines because you already know where those are and should have a clue as to what price 'should' do. The MACD is secondary.

A high probality trade is where everything lines up: When price comes back to the 21 and then continues on the original direction or there is a strong trendline/resistance point where price has reacted the same way for a number of times, a double top, triple bottom, h and s, those are high prob trades..again you have clues. Risk is whatever you can tolerate. I have at times used a smaller lot size if I feel like the setup is good but there is a lot of volatility that merits the larger stop. I would much rather use a limit order to get in in the event of that pullbaclk to get a better fill. I quit chasing the market a while ago, limit orders give me more discipline. But, if the stop has to be 100 pips...that's huge in anyone's game. If I don't opt for the limit order, I have no problem waiting things out for the next setup.

TP's: I usually go in with three lots or take out 1/3 of the position along the way. I always look for about 20 on the first. Sometimes this can happen very fast and the market just takes off in your direction. If that is the case, take the first one out and move the second to b/e and make the rist on the third equal to what your pip gain is on the first position. This leaves ou with 0 pips if you get stopped out on the other two positions but you didn'y lose anything either. If things move really fast I'll exit to for about 50 total, move the third to b/e and let it do what it wants. If it's 50 in the moey than trail it or just exit. You TP areas can be hard to spot but old trendline, previous s/r areas or round numbers can all be profit areas. But remember, if a s/r area is 50 pips away and that is one of you TP areas AND that position is 5 pips away from that 'area', to me that target is considered hit and I'll get out. I've had a lot of positions open where I was up on that last lot 60, 70 pips and I was thinking, go for 100...only to see that last lot come back to b/e. We all get lucky here and there but that 60 or 70 pips open position could have taken weeks to give you an entry for and can be gone in a matter of hours. I lock in everything I can now....

now we have a CT followed by to little dojies and a nice tail of that big TL ,who is in ? for me SL is too big and prefer to get in with smaller TF

The 1hr TF closed below the 21MA. If the current candle is bearish, i take on the downward movement. If not just wait for it to retrace. MACD also just pass the 0 line and ADX also intersected. It all good...

I just want to add a couple of my own thoughts to Palmer's comments which are very helpful as always.

QUESTION 1

I will talk only TC signal for easier explanation. The example is shown below.

In a trend price will expand, retrace, expand, retrace etc...This is the trending market rhythm that we all look for. Price retraces back to the 8/21 EMA and then expands away from the 8/21 EMA. What you are actually looking for in a MACD TC signal is an indication that price has finished retracing and is expanding with the trend again.

The risk in taking a TC signal on a huge candle is that the TC signal may have come too late, price may have already expanded and price needs to retrace again. i.e. you are jumping in on the TC signal just as traders who got in at retracement levels (bottom blue box in example) are taking their profits (top blue box in example), and you are left stressed and doubting your decsion as price moves against you. The highest probability and best risk/reward TC signals are those that indicate price is about to or just beginning to expand again, no matter if the signal candle is 20 pips or 100 pips.

Do not confuse a huge candle and a 100 pip candle. In some market conditions 100 pips is a huge candle, in other conditions 100 pips could be a spinner candle. Just be aware of the risks you are taking when you take a TC off a huge candle. You are risking that you have missed the price expansion and price needs to retrace again.