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4 Hour Strategy (MACD)

  • #18,201
  • Edited Dec 13, 2008 2:05am Dec 12, 2008 2:33am | Edited Dec 13, 2008 2:05am
Quoting mgokhank
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...

QUESTION 2

Just want to also add to Palmer's notes on profit targets. Profit targets also need to be discretionary and considered on every individual trade, based on a feel for the mode the market is in and from traders experience. This is why they are so complicated and nobody can say "I have studied GBPUSD for a year now and it is optimum to take profit after 30 pips on every TC".

Some hypothetical trades to illustrate this point

Trade 1
The market is consolidating in a triangle but you 'pick out' a TC within the triangle. The market has been whipsawing around lately, and you have a feeling this trade might be a little riskier than others. How do you manage this trade. You might only go for a quick small fixed target win of about 20-30 pips.

Trade 2
Then you get a TC signal with price breaking out of this emotional triangle it has been stuck in for the past four weeks. Would you manage the trade the same way and go for 20-30 pips?? Probably not, there is potential of leaving 100's of pips on the table. You will use a different 'play' and go for a bigger win, you should try and position yourself to ride the emotional trend and wait to manually close the trade based on trend stalling.

Trade 3
Now price is gently trending upwards and 'climbing the stairs' up. You get a gentle little TC. How do you manage this trade? Fib targets (as shown in my post above) are great for these types of trades.

Trade 4
And after the long drawn out 'climbing the stairs' trend upwards, price falls sharply, you go short on a TC signal. Price is emotional with tails to the top and you anticipate price to 'jump down the elevator shaft'. Would you manage this trade the same way?? No

I hope you get my point. Every trade will be different, and your TP's, SL and trade management should reflect his. With experience you will learn what 'play' to use on each trade. You will learn when to go for a bigger win. When to only go for 20-30 pips. When to go to BE as soon as possible etc. etc. Phillip has mastered this.

I hope this has helped.
The trend is your very wealthy friend
  • #18,202
  • Dec 12, 2008 2:33am Dec 12, 2008 2:33am
Quoting Al1nn
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...
if you have pivot point on ur chart there is daily pivot on 1hr chart @1.3250 that is resisting price to go down you will see it, i made it bold or what do anybody suggest
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  • #18,203
  • Dec 12, 2008 3:26am Dec 12, 2008 3:26am
I read your answers and thought about them . They are very very helpful. I thank you friends. Thank you very much friends.
  • #18,204
  • Dec 12, 2008 3:59am Dec 12, 2008 3:59am
Quoting Phillip Nel
Info
Hi Phillip

the MIG files server worked fine
and I checked my charts with the last wrap up you posted its a go.

thanks for the effort
  • #18,205
  • Dec 12, 2008 4:14am Dec 12, 2008 4:14am
Quoting kareemoladun
if you have pivot point on ur chart there is daily pivot on 1hr chart @1.3250 that is resisting price to go down you will see it, i made it bold or what do anybody suggest
You are right, can you give me the pivot point indicator. Price found resistance @ 1.3250. Now the price bounce off the 21MA but SL is 84 pip. Therefore will wait if the price will retrace before entering in a trade
  • #18,206
  • Dec 12, 2008 4:51am Dec 12, 2008 4:51am
Quoting teddyb
Hi Phillip

the MIG files server worked fine
and I checked my charts with the last wrap up you posted its a go.

thanks for the effort
hi
how should use that file?
  • #18,207
  • Edited 5:51am Dec 12, 2008 5:34am | Edited 5:51am
Been looking at Euro until i didn't notice Cable gave a very good pattern, the tweezer. Refer to pix for further explaination

Entry 1.4908
SL 14938
1st TP 1.4841
2nd 1.4863

Update
Stopped out, SL hit
Attached Image
  • #18,208
  • Dec 12, 2008 7:29am Dec 12, 2008 7:29am
hi everybody ,i think today do not trade ,
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  • #18,209
  • Dec 12, 2008 8:10am Dec 12, 2008 8:10am
Quoting mr.krai
hi everybody ,i think today do not trade ,

we ony needs confirmation now may it might pull back if it pull back i suggest short but if it doesnot pullback it should be TC
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  • #18,210
  • Dec 12, 2008 8:28am Dec 12, 2008 8:28am
Quoting kareemoladun
we ony needs confirmation now may it might pull back if it pull back i suggest short but if it doesnot pullback it should be TC
thank , if candle i will trade to follow this
Attached File(s)
File Type: pdf candle.pdf   62 KB | 1,272 downloads
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  • #18,211
  • Dec 12, 2008 8:31am Dec 12, 2008 8:31am
The price level of 1.3400 is acting as a very strong resistence, last few bars on the 4H has stalled and bounced off of it. On the 1H its a nice triple top formation. A clear break above 1.3400 would in my opinion shoot right to 1.3500 and to keep in mind, a strong monthly trend line is not too far away around 1.3650 so a break of 1.3400 but test that level.

Also being friday and so many volatile news out, I would definitely not hold any open trades over the weekend.
Keeping Life Simple
  • #18,212
  • Dec 12, 2008 8:49am Dec 12, 2008 8:49am
Quoting time1300
The price level of 1.3400 is acting as a very strong resistence, last few bars on the 4H has stalled and bounced off of it. On the 1H its a nice triple top formation. A clear break above 1.3400 would in my opinion shoot right to 1.3500 and to keep in mind, a strong monthly trend line is not too far away around 1.3650 so a break of 1.3400 but test that level.

Also being friday and so many volatile news out, I would definitely not hold any open trades over the weekend.
price has been bouncing off 1.3400 for almost 24hrs now ,but am not sure may iit can pass that level.

NOTICE PLS ALWAY POST IN BECAUSE I DO MAKE USE OF YOUR IMFORMATION.THANKs
  • #18,213
  • Dec 12, 2008 9:04am Dec 12, 2008 9:04am
Quoting time1300
The price level of 1.3400 is acting as a very strong resistence, last few bars on the 4H has stalled and bounced off of it. On the 1H its a nice triple top formation. A clear break above 1.3400 would in my opinion shoot right to 1.3500 and to keep in mind, a strong monthly trend line is not too far away around 1.3650 so a break of 1.3400 but test that level.

Also being friday and so many volatile news out, I would definitely not hold any open trades over the weekend.
I agree, it's a tough area right now. The rest of the day has a potential to be very volatile though with the Auto bailout failing and someone in the background that may change their mind and step in to do something. If you do take a position I would monitor it very closely today and close everything at the end of today's session...
  • #18,214
  • Dec 12, 2008 9:06am Dec 12, 2008 9:06am
A good example of counter trend.
Price turnaround at trend line
A big long tail, followed by bullish candle
MACD Aggressive turnaround signal

I did not trade it because Stop loss too much for me, but for someone that meets the money management criteria, it could be done.

I would have TP1 to the 8ema and let the other half go to 21ema if it goes up to that level while moving to BE to protect the pips.
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Keeping Life Simple
  • #18,215
  • Dec 12, 2008 9:50am Dec 12, 2008 9:50am
Quoting austrader
QUESTION 2

Just want to also add to Palmer's notes on profit targets. Profit targets also need to be discretionary and considered on every individual trade, based on a feel for the mode the market is in and from traders experience. This is why they are so complicated and nobody can say "I have studied GBPUSD for a year now and it is optimum to take profit after 30 pips on every TC".

Some hypothetical trades to illustrate this point

Trade 1
The market is consolidating in a triangle but you 'pick out' a TC within the triangle. The...
Thanks
The previous and this post is worth gold. That is exactly how to trade. Each one has its own plan according to the rhythm.
All you people reading this please read the posts by Palmer as well prior to this postings. This is the heart of the system.

Read posts 18229, 18232, 18233

Phillip
  • #18,216
  • Dec 12, 2008 10:54am Dec 12, 2008 10:54am
Just one today. Been a good week, all positive trades, must be about +270 for the month so far using the 4H and 1H system.

I had been looking to short the swissie again since Monday. I missed some other signals this week but this one worked out well.

SL was only 50pips back to 200sma on the 4H. Entry at the 21 EMA. It was the tails ont he 1H that I noticed today.
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  • #18,217
  • Dec 14, 2008 7:42pm Dec 14, 2008 7:42pm
hello everyone,

Hope you all had a great weekend. Lets hope we can have a less volatile market this week to bank a few pips. I want to bring up a point. I had taken a look at price action and what it does after a big candle. I have noticed that when there is a huge candle on the 4H whether it be long or short and it is followed by a MACD signal lets say TC or Zero break or Zero bounce, If all other rules are intact then stop loss in most cases are huge, maybe about 100 pips. Now what I have noticed is that usually in more cases, the price retraces to at least the 50% of the previous candle before continuing. This is when the different stage entry can be used. You can place limit orders at the 61, 50, and 38 fibo lines and if not all, most likely the 2 orders will be taken and that will allow you to set your stop loss above the noise of the previous candle letting you be there for the continuation. One example I can show you is the USd/Jpy chart and the trade I took. I usually don't trade the usd/jpy but i am experimenting with it and i took this trade because of the following reasons

down trend bias, on 4H, 1H, and daily charts.
price action had retraced back to the 21 and MACD showing TC signal
the S/L as you can see is more than 100 if taken right after the close of the candle.
So instead of entry at the close of candle. and setting stop loss -50 of what you entered at. Wait for retracement as you can see it retraced almost 3/4 of the candle and have set limit orders to buy at the different fibo lines as mentioned above.

Just something to mention as I know Phillip has mentioned before but this shows that patience and having a plan before entry is very important and not just to enter at the close of the candle and picking stop loss just because it's less than 50 pips.
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Keeping Life Simple
  • #18,218
  • Dec 15, 2008 7:57am Dec 15, 2008 7:57am
H1 entry after daily TL broken up closed half for 30pips and set the rest at 50 trailing stop
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  • #18,219
  • Dec 15, 2008 8:01am Dec 15, 2008 8:01am
time:

I use limit orders quite often to lower a SL even if the SL is 'within bounds'. There seems to be at least some sort of pullback after a signal is given. This also adds a little bit of discipline to trading as far as not trying to catch a fast moving market and thinking you might have missed a larger move.

Sorry the website hasn't been updated lately...I'll get to it as soon as I clear up some other hosting issues...
  • #18,220
  • Edited 10:10am Dec 15, 2008 9:16am | Edited 10:10am
wait pullback again above TL stop loss 1.3545 entry 1.3565 target
long length , 1.3890
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