4 Hour Strategy (MACD)

I've emailed Phillip to ask him what he thought of this and after I got his response he gave me the ok to post this. I still think of this thread as his thread so I wanted his ok first. Take a look at the colored bars at the bottom of the 4hr chart here. I've reduced the MACD to make more room. When the bars are yellow...what do you see with the price?

Hi Palmer

Firstly it is sad to see Phillip "left" the thread as I think I have located a workable strategy in the past 2-3 months after going thru a number of strategies that do not suit me.

Since Phillip has agreed you to post the RB, do you like to share with us?

Thank you.

Regards
Ohmanfx

Hi Palmer...

That RB doesn't look really helpful to me. I still prefer the MACD...and...hey...I did e-mail Philip last time but no reply...this is unfair

Anyway...thanks for sharing new idea mate...

the green bar in the bottom window is:consolidation
the yellow bar in the bottom window is:bullish
the red bar in the bottom window is:bearish

Hi all...

I've plotted a few points where the price have met res/sup trend lines during these 2 weeks.

Overall, EU is still in a downtrend pace but there is also a possible breakout. Time will tell us though...

HAVE A LOOK AND MAKE YOUR OWN THOUGHT

OK, let's break this down a little bit. The past few days I've been bringing up the subject of how when there is strong rhythm, such as the case here, and how price is riding the 8ema. This happens over and over throughout the year and these strong rhythm periods can last for several days. These runs are the areas where it's 'a nice place to be' as far as trading goes.

I've also talked about when during this same type of run where price has moved away from the 8ema and forms a gap. Here, one of two things will happen:

1) Price stalls (ranges) and the 8ema catches up to the price.

or

2) Price pulls back and comes back down to the 8ema.

The 8X21RubberBand4hr indicator:

It's very simple: If the 8ema is greater than the 21ema (probable uptrend) a green bar is shown. If the 8ema is less than the 21ema a red bar is shown (probable downtrend).

When the bar color is yellow this means that a gap has formed between the 8ema and the low of the price bar (in an uptrend) or a gap has formed between the high of the price bar and the 8ema (in a downtrend). For the EURUSD, this gap value is .0030. Meaning if the difference between the high or low and the 8ema is .0030 or greater ( the gap ) a yellow bar is shown.

The 89sma was not taken into account here because there are times when the 8ema can be greater than the 21ema and both be lower than the 89 and eventually cross above the 89sma to start a strong rhythm trend per the method. I left this out because there is a potential here to get in early on a trend when this is happening.

Also, for the few indicator hacks I've done before, when there are 3 or more moving averages involved some of the bars can repaint. I'm not sure if I'm doing something wrong or it's a function of MT4. So, it's up to you to know where the 89 is in relation to what the 8 and 21 are doing.

Why is this relevant?

Take a look at the yellow bar areas and the price. Just thinking about the 4hr chart here, when the bars are yellow (these are always on the close) it can be very difficult to find an entry because of the speed of the market with things moving fast. If the bar following a yellow bar is green, again on the close, this could be your signal for a pullback. The small light blue lines show a price stall (straight) or pull back (downward).

Switch this around for a bear trend.

I do better looking at things visually or systematically. Anything to take some of the guesswork or ifs out of something the better. At least for me it is. So if there is a yellow bar on the close I see this as a no trade area for me because price is moving too fast. On the close if the color bar turns back to green, then look for an entry because price has slowed down a little and may offer an opportunity to re-enter the prevailing trend.

The green vertical bars mark the close of a green bar after a yellow bar. There are a number of ways to play this for an entry:

- Put a buy stop in at the high ( plus x pips ) from the top of the stalled range.

- Buy on the close of the next green color bar.

- Buy on the MACD signal when it's close is green from previously being red.

Again, this is just a speed of the market rhythm indicator. Not an indicator to trade by. You still need to read the moving averages on the charts and see if they are ranging or if the volatility is high. The best use for this is when the rhythm is strong such as the case here.

1hr entry info while the 4hr bars are yellow coming up a little later.

I need to clean up the code before posting it here and then put it on the website with some more info later. It's a hack from another hack so there is a lot of junk code that needs to be filtered out...stay tuned.

I've reinserted the MACD here also...for WG

Wow...dude...well-explained....welldone mate...!!!
Thanks a lot for this new idea...will stay tuned with you

Hi, palmer. That's really a great reserch

Hi Palmer

Thanks for your explanation.
I find it is so easy to see colors at a glance.
Can you tell where to find the 8X21 Rubber Band 4Hr indicator to incorporate in the H4 MACD chart?

Again, thanks,
Ohmanfx

Today will be an interesting day since ECB will make their decision whether to keep the rate @ 2.00% or not...!!!

Everybody should be in position right not...goodluck guys...!!!

Morning All,

Its been a week of none trades for myself - I've just taken the TC on the GBP/USD

Entry: 1.4512
TP: 1.4682
SL: 1.4410

I will try and post a picture in a bit - candle formation was a strong bullish engulfing pattern which engulfed the last 4 4H candles.

Managed to find time to do a quick screen shot.

The strength of the 4H candle enforced this trade. Please seen the screen shot attached. There are quite a few lines on the chart but hopefully you people can see the rhythm which has started to develop off the 21 EMA.

If you have any questions please ask.

Nice trade WG. That pair is moving up nicely for you...

Here's the Gap indicator. I renamed it but it's the same. This is only for the EURUSD. I need to look over the other pairs and find what looks like a good value for the gap to be. For the 4hr EURUSD it looks like .0030 is a good fit.

There are two external inputs to enter: fastEMA set to 8 and slowEMA set to 21. These are the standards for the method so there best kept as is. I'd make the gap value an external value as well but the code does not like a decimal to be the first value entered nor does it like 0.00xx either so I'll have to format a gap indicator for each pair.

Take a look at the 4hr EURUSD chart with this and find where the rhythm is strong and then look for the yellow colored bars during those runs. That's where I think the best 'study time' should be.

I'll put this on the website as well with some more charts too later...

Oh yeah, can everyone access the website? saka is telling me that he can't load it but I'm thinking that it's the Chinese government blocking certain sites...

This is current with the bar being yellow so what is this telling me...

The market is moving very fast right now and

1) I'd expect price to make it back to the 8ema

or

2) Price to stall at some point and have the 8em catch up to the price

...either on this bar or within the next few bars.

Hello Guys

This is great threat. I am starting to read it. Have small problem. Pls for help

Do you mean the mp3 files?

Yes I have a sound but no picture

Looks like the EURUSD is working on a bounce from the trendline here. Also, as soon as the Dow starts to make a gain, this pair looks like it wants to do the same. Seems like everything is waiting on the stimulus bill to be passed, or not. Until that huge issue i settled, we might just be stuck here for a while before things get going again. Looks like a head and shoulders pattern too. If this neckline is broken....look out below???

The mp3 files are just audio. Sometimes, but not all of the time, Phillip would post a chart to accompany the mp3 as a separate pdf file....

See the last two charts...

Price came back to the 8ema after pulling away from it. The colored bar can change during the candle if the gap value is +/- .0030. More validity to trendlines perhaps???

How can you use this:

If you see the gap on the 4hr you can monitor a lower timeframe for a long signal thinking that the 4hr gap will be closed or at least tick back up. This is aggressive trading because you are going against the longer term trend which is down. But, these gaps can last several bars so you might go nuts waiting for that long entry signal on a lower timeframe.

Using this on the 4hr method, wait for the close of the bar for the gap to fill or continue and then decide what to do. Look to the 1hr charts for clues as well.

Back later...