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4 Hour Strategy (MACD)

  • #2,761
  • Edited 10:48am Mar 18, 2007 10:14am | Edited 10:48am
Quoting Phillip Nel
Info
Phillip,
Please see Phillip's posting on page Page 183 posting 2738. chart of USDJPY.

Here, I am not seeing point B and Point C (in his chart) as double bottoms.
I am seeing them as individual "agressive reversal Trades".

Can you differentiate between the approaches you would have taken on the two Agressive trades at point B and point C?
Point B is same as point C in MACD. Here are my observations for you to comment and correct:
Observation #1:
At agressive trade point B, if we had followed your philosophy of (i) "Determine your SL to about 35 to 40 pips and (ii) place your buy limit order so that this 35 to 40 pip SL is below the low of previous candle by at least 15 to 20 pips", then we would not have entered this long trade at all which is good!

At point C, the same approach would have allowed us to enter the long trade which is again good!

Observation #2:
Both the aggressive long trades at point B and C are counter-trend trades. Then, how do we differentiate between them and favor trade at point C and refuse the same at point B?
At the agressive long trade at point B the price is far away from both the fast MAs (8 and 21). So, for the market to go up, it has to travel horizontally (transverse travel) for a while to reach the fast MAs, and then cross those MAs up and, if at all it does these two uphill tasks, then and then only it can muster the courage to go up. This up hill task for the price [(i) travel transverse to come close to the two fast MAs and (ii) cross them up], these two uphill tasks are the reasons for us to be skeptic (or hesitant) to go long on the aggrsssive trade at B.
Where as at point C, the similar agressive trade is pretty close to two fast MAs. It just has to cross the two MAs which are in the vicinity of the price. THERE IS NO TRANSVESRE TRAVEL (horizontal travel) needed to come close to those two fast MAs. So we can feel comfortable to go long on this trade.

Here, Phillip, the concept of what you said about the MACD signal and the (e)motion of the price action makes great sense. In both cases (pt B and Pt C) there was an MACD signal (agressive trade). There was no difference in these two signals. But the price action, the price (e)motion played its role and made us not to take the signal at pt B and take the signal at point C.

What is your comment? Can we safely hesitate to take an MACD signal (revesring signals only) if the price is pretty far away from the two fast MAs and not to hesitate to take similar signal if the price is pretty close to the fast MAs?

Please read this twice with your UADJPY chart (double bottom agressive trades chart) before commenting, because I might not have put forth my thinking clearly.
Thanlks a lot for the hard working bunch!.
-Chandra
  • #2,762
  • Mar 18, 2007 10:29am Mar 18, 2007 10:29am
Quoting O'Zeeke
Thanks kunz78, appreciate of your effort

Thank you,
Thank you,
Thank you,

This is awsome for everyone, i personally have read through the thread twice so i know this will help everyone.

great work

Dean
  • #2,763
  • Mar 18, 2007 10:43am Mar 18, 2007 10:43am
Ozeek,

I cant get the download to work, i keep getting redirected to a error page??

any help would be great

Dean
  • #2,764
  • Edited 12:32pm Mar 18, 2007 11:07am | Edited 12:32pm
Quoting tamkras
Jim, I am fascinated with your observation. This pair - usd/jpy - is really a great inspiration. I turned the chart into monthly and flipped it. You can see where the price is, today, in pullback territory. "If I have million dollars", then this is probably a life-time opportunity for monthly swing players, he-he. Just do not laugh at me - I like classic stuff. I am reading classic books over the weekend. Yours, T.
Him Tamkras,
I don't think one needs a million dollar to get in and trade this monthly TF. Myself and Jim noticed similar opportunity last night on GBP/JPY. We were serious when we looked at the weekly chart (I don't know how to go to monthly in IBFX).

Let us get interested in this weekly/monthly trading opportunites. With wise MM, even poor people (in Forex mkt standards) can trade this out to become rich people. Open a discussion on weekly and monthly opportunities with Phillip's MACD. You never know, we may a take only one trade (like GBPJPY weekly and USDJPY monthly) and ask our broker to send money to our address in Bahama every month! Phillip, do you like Bahamas? FOr a South African, Bahama may not be a great attraction. You can go to Iceland and ask your broker to send you moeny to your Iceland bank a/c every month.
-Chandra
-Chandra
  • #2,765
  • Edited 12:31pm Mar 18, 2007 11:38am | Edited 12:31pm
I don't know ho to go to monthly in IBFX
Chandra, there are no monthly charts in MT3, but they are available in MT4.
The monthly GBP/JPYchart is really interesing now. It is a MN MACD Round Top there. It seems the candles and resistance of 238.75 (July 1998) confirm a downtrend in progress.
http://forexbarometer.com/graph/gbp-jpy-mn.gif
Ben
  • #2,766
  • Mar 18, 2007 12:38pm Mar 18, 2007 12:38pm
Quoting fxhermit
Hi,
Just some thoughts on the charts that you posted :

The first chart shows a very classic ABC formation and as you discovered had a very nice sweet spot for the entry.

The second chart shows an ABC formation that formed as a triangle prior to the breakout. When one of these blows by you as may be the occurance - don't walk away and think that you have missed the trade. On the contrary, be on the look out for the "hook". The "hook" is the first pull back to test the 21 EMA and any other MA that may be in confluence (see your red line on your second chart - the "hook" is where price did the retest). The break from this area is often also a good place to "stand in front of the market" because once again, it can not move against its own momentum, hence it is another sweet spot and is a classic swing trader technique often employed after an ABC move..
That is eactly what Phillip said in his MP3 when he was talking of a frien of his who places orders some pips below the low of signal candle and if he misses the entry, look for next opportunity to enter the same trade.
-Chandra
  • #2,767
  • Mar 18, 2007 12:45pm Mar 18, 2007 12:45pm
Quoting Pinggarcia
Hello,

Thanks for the very informative posts.

I am just new in fx trading, barely 5 months. I have read much about this 4H MACD strategy, and I liked it so much, albeit I still get very confused, especially while the pattern are forming.

Question - is this 4H strategy strictly for 4H setup only, or I can use it for 1H or 30M setup too?

Because I saw the other thread of Philip Nel, the 5M strategy, and it uses a completely different style.

Help please?
4hr strategy and 5min strategy are two different strategies of Phillip. 5 min one is to learn discipline and for small pip gains. 4hr is more serious strategy and aims for bigger chunk of pips. While you are in hr, you can peep into 1hr for a better entry point (for signal from 4hr chart). Particularly, when there is Round Top (RT) or Round Bottom (RB) signal in 4hr chart and you have an apprehension whether this RT/RB signal may turn out to be a Trend Continuiation (TC) signal in the next 4hr candle, then you can go to 1hr. chart and see whether it is confirming any TC signal. If it does, then the RT/RB signal in the 4hr chart could turnout to be a TC signal in the next candle.
-Chandra.
  • #2,768
  • Mar 18, 2007 1:08pm Mar 18, 2007 1:08pm
Quoting hard1head1
Everyone,

I have stayed away from the GBP/JPY simply beacuse of the 80-90 pip retracements. I have now figured out how to make this work for you. Check this pair out, and I know it has a 10 pip spread, but the way this thing moves, it really doesn't matter. Just recently it has had a 2 day move of over 1000 pips. I have seen this thing move 400 pips in one day. I got in Friday on a trendline break, after an evening star on the 4 hour, a bearish engulfing candle on the 1 hour and a T/C formation from the 4 hour strategy. With all that you cant miss, I didn't miss, I made 75 pips after those signals. I got out at market close cause I didnt want to lose what I gained over the weekend from a gap. Has a lot more gas in the tank and am looking at another 400 pips. Gonna wait for a nice long retracement and get back in. Beware, however, this pair has huge retraces and can clean out your account in a heartbeat.
Hi Jim,
I know what UR are talking in those two chart. Can U please try to make your future charts a bit bigger. We cannot read the text on the charts.
Thanks.
-Chandra
  • #2,769
  • Mar 18, 2007 1:25pm Mar 18, 2007 1:25pm
Quoting hard1head1
Everyone,

I have stayed away from the GBP/JPY simply beacuse of the 80-90 pip retracements. I have now figured out how to make this work for you. Check this pair out, and I know it has a 10 pip spread, but the way this thing moves, it really doesn't matter. Just recently it has had a 2 day move of over 1000 pips. I have seen this thing move 400 pips in one day. I got in Friday on a trendline break, after an evening star on the 4 hour, a bearish engulfing candle on the 1 hour and a T/C formation from the 4 hour strategy. With all that you cant miss, I didn't miss, I made 75 pips after those signals. I got out at market close cause I didnt want to lose what I gained over the weekend from a gap. Has a lot more gas in the tank and am looking at another 400 pips. Gonna wait for a nice long retracement and get back in. Beware, however, this pair has huge retraces and can clean out your account in a heartbeat.
Jim,
Great analysis!
I notice you are augmenting Phillips signals by earnestly adding candle patterns for further confirmation and you have gained a longer-term vision (see the forest, not the trees). These two points are a break through for our group studying Phillip's MACD.
Thanks.
  • #2,770
  • Mar 18, 2007 1:41pm Mar 18, 2007 1:41pm
Quoting Chandra
Hi Jim,
I know what UR are talking in those two chart. Can U please try to make your future charts a bit bigger. We cannot read the text on the charts.
Thanks.
-Chandra
May I suggest that you save only your charts at 600x600 and not the rest of your trading platform layout. That should make your charts look beautiful! Love your posts, both of you, keep up the good work.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #2,771
  • Mar 18, 2007 1:55pm Mar 18, 2007 1:55pm
Quoting jarroo
Oh yeah. Got my 20 pips. lol .
This is how I played it.

First of all, I very rarely take a countertrend trade unless its a clear signal on MACD, the 8 ema and 21 ema is flat lining or turning down (in the case of a short countertrend). The 89 sma is flat lining, or turning. S/R level make sense, etc.

In this case the all MAs trending up. And price was dancing on top of the trend line. No way was I looking to short. Now the Euro could have easily gone the other way and I would have be out with a loss, but to me that old saying of "stay with the trend" gives a higher probability of success.

One thing I do (which may burn me soon) is that once a signal is given, I don't pull the trigger right away. I see if price falls a little (long trade). In this case it did fall a little right down in between the 8 ema and 21 ema and then it went up.

Man, this is fun.

Jim
WHOS DO YOU USE
  • #2,772
  • Mar 18, 2007 2:00pm Mar 18, 2007 2:00pm
May I suggest that you save only your charts at 600x600
If this applies to my 1400px chart as well, sure I can, but in this case the patterns are not so vivid and obvious. I've tried to add the picture as attachment but they convert it to a nasty small JPG where nothing visible at all, so still no a perfect solution for the scrolling vs. chart quality problem. I have truncated the image at previous resistance date, may be it makes things a bit better.
Ben
  • #2,773
  • Mar 18, 2007 2:03pm Mar 18, 2007 2:03pm
Quoting jdoldfield
WHOS DO YOU USE
MIG and interbank FX charts. I trade with FXsolutions

Jim
Indicators show the past. Price Action "Indicates" the future.
  • #2,774
  • Mar 18, 2007 2:46pm Mar 18, 2007 2:46pm
Quoting O'Zeeke
Hi Scott, thanks for helping tto clear this up for me. If i got this right, you do a "cheapskate" entry order at 45% retracement of the previous candle(the one that give the macd signal) if it closes around the high? That would sure get a better price and better r/r too. What % would you say of these entry orders works for you? Thanks Scott.
Hi O'Zeeke,

So far very limited numbers [only 6 signals] and missed 1 by 1 PIP!

Scott
  • #2,775
  • Mar 18, 2007 2:49pm Mar 18, 2007 2:49pm
Quoting Chandra
Phillip,
Please see Phillip's posting on page Page 183 posting 2738. chart of USDJPY.

Here, I am not seeing point B and Point C (in his chart) as double bottoms.
I am seeing them as individual "agressive reversal Trades".

Can you differentiate between the approaches you would have taken on the two Agressive trades at point B and point C?
Point B is same as point C in MACD. Here are my observations for you to comment and correct:
Observation #1:
At agressive trade point B, if we had followed your philosophy of (i) "Determine your SL to about 35 to 40 pips and (ii) place your buy limit order so that this 35 to 40 pip SL is below the low of previous candle by at least 15 to 20 pips", then we would not have entered this long trade at all which is good!

At point C, the same approach would have allowed us to enter the long trade which is again good!

Observation #2:
Both the aggressive long trades at point B and C are counter-trend trades. Then, how do we differentiate between them and favor trade at point C and refuse the same at point B?
At the agressive long trade at point B the price is far away from both the fast MAs (8 and 21). So, for the market to go up, it has to travel horizontally (transverse travel) for a while to reach the fast MAs, and then cross those MAs up and, if at all it does these two uphill tasks, then and then only it can muster the courage to go up. This up hill task for the price [(i) travel transverse to come close to the two fast MAs and (ii) cross them up], these two uphill tasks are the reasons for us to be skeptic (or hesitant) to go long on the aggrsssive trade at B.
Where as at point C, the similar agressive trade is pretty close to two fast MAs. It just has to cross the two MAs which are in the vicinity of the price. THERE IS NO TRANSVESRE TRAVEL (horizontal travel) needed to come close to those two fast MAs. So we can feel comfortable to go long on this trade.

Here, Phillip, the concept of what you said about the MACD signal and the (e)motion of the price action makes great sense. In both cases (pt B and Pt C) there was an MACD signal (agressive trade). There was no difference in these two signals. But the price action, the price (e)motion played its role and made us not to take the signal at pt B and take the signal at point C.

What is your comment? Can we safely hesitate to take an MACD signal (revesring signals only) if the price is pretty far away from the two fast MAs and not to hesitate to take similar signal if the price is pretty close to the fast MAs?

Please read this twice with your UADJPY chart (double bottom agressive trades chart) before commenting, because I might not have put forth my thinking clearly.
Thanlks a lot for the hard working bunch!.
-Chandra

Hope this help. It does not matter how far it is away from the 8 and 21EMA as long as your R:R ratio is one or better and that is important for a countertrend trade. Remember that at a certain stage a RB or RT will be a countertrend.
Attached Image
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File Type: zip UsdJpy1.zip   831 KB | 1,284 downloads
  • #2,776
  • Mar 18, 2007 4:01pm Mar 18, 2007 4:01pm
Can someone teach me how to screenshot a chart to get it the way you want it to look. I cant seem to figure it out. Whats 600/600???

I need a little bit of help

j
  • #2,777
  • Mar 18, 2007 4:13pm Mar 18, 2007 4:13pm
In MT4, go to the file menu and select save as picture, 600x600 max to post here at the Factory...that's it.
  • #2,778
  • Edited 4:36pm Mar 18, 2007 4:19pm | Edited 4:36pm
Quoting Palmer
In MT4, go to the file menu and select save as picture, 600x600 max to post here at the Factory...that's it.
Pretty easy.

right click MT4 chart, save as picture, enter 600 x 600, input file name and post.
Attached Images
Indicators show the past. Price Action "Indicates" the future.
  • #2,779
  • Mar 18, 2007 4:27pm Mar 18, 2007 4:27pm
That is easy, Thanks a lot.

J
  • #2,780
  • Mar 18, 2007 4:31pm Mar 18, 2007 4:31pm
Quoting Phillip Nel
Do this little test and tell me what you think. Get up from behind your screen and watch the chart on your screen by standing a distance away and see how the whole picture comes to you. One tend to get to focused on the spot where the action is that you forget the rest of the graph.
Hats off to you Phil, not only a great trader and educator but a wonderful story teller as well.

Hope you enjoy the following chart:

The yellow line is the canyon, the green line is the force of the water from one side of the canyon to the other, the blue line is the water itself, the MACD is you doing some white water rafting. The blue circles are where perhaps some of the rest of us jumped on board. Thanks for the ride!
Attached Image
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
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