4hr MACD - Trade Journal

- Downtrend continues...

SHORT SCENARIO:
- Looking for TC off of 21, descending TL, IT @ 1.7231.
- Need to be aware of aggressive TL resistance that has been broken. Any price targets will take this into account

LONG SCENARIO:
- None at this stage. No decent support for price to move off, and no real weakness yet showing in PA. Also:
- prev. IB broken downwards....
- No MACD divg.
- H1 may develop into 3 sisters for a long trade...H4 TF yet to support such a move so won't trade this based on H1 alone.

- Daily IB @ 98.92 holding strong; MACD divg.; prev IT @ 100.36 broken; price moved above 21EMA.....weakening of downmove.

SHORT SCENARIO 1:
- price rises to 101.60 IT (tested and held on 9 Oct). If PA confirms and R:R ok to any newly formed IBs, then short.
SHORT SCENARIO 2:
- price breaks D1 IB, retraces and continues downmove. TARGET: will trail SL as there are no immediate targets
LONG SCENARIO:
- price drops to H4 IB @ 99.36 or D1 IB and finds support. TARGET = new IT @ 100.65

- price approaching 103.55 D1 IB and 89 SMA

SHORT SCENARIO (1):
- move off 103.55 / 89SMA

LONG SCENARIO (2):
- break of 103.55, followed by TC up. R:R may be poor to TL.

- price retraced back to prev IB. Watching for entry long....
- TARGET = 102.10 IT (use 101.83)

ok here is yesterdays trade which has some good lessons.
Was anticipating an upmove off 1.3461 IB level. I failed to have a thorough plan / market analysis in place which should have identified:
1) No IB on Daily - no expecting a significant move upwards
2) IB on H4 is really not that amazing - based on 1x spinner....as per H4, indicates caution (big move not on the cards)

Entered trade on H1 after morning star. Should have noted that price dropped beneath 1.3461...not a clean bounce. Along with points (1) and (2), think this should have alerted me to stay out of this trade.

Entry was 1.3468, SL = 1.3410 (13 pips beneath lows). Risk = 58.
TP1 at 30 hit. Left SL at 1.3410 in anticipation of further moves up to target at 1.3550 level (prev. IT and 21EMA). This again was a mistake - anticipation was not for a bigger move.
...SL hit

Result = +30, - 58
= -14 pips avg LOSS

U/J setup yesterday was far superior to E/U. Both based on IB formations, but U/J was far stronger. Unfortunately signal candle on U/J was too large, and I took E/U instead.

U/J thoughts:
1) Anticipation was for a good up move:
- D1 charts show nice clean IB around 10 March. This has been tested and held several times
- H4 prev. IB has good base consolidation from 2-3 candles (vs. 1x spinner on E/U). Also some decent divergence.
2) Was watching H1 but move was too large (on M15 was messy and couldn't see much solid)

May have been able to enter this trade with smaller SL in 2 ways:
a) Retracement entry (wth order at 'minor IB' just formed) on H1 immediately following bull candle
b) after 2nd test of minor IB by bullish pin bar

....price currently up 150pips from main H1 entry and approaching Target as per earlier post http://www.forexfactory.com/showpost...5&postcount=24

There were around 4-5 potential trades last wk. All were winners to some extent. Trades 1 and 2 were the best setups.

Trade 1:
Market open; below 21 / downtrend - anticipation is short wth gap fill. Perfect H1 entry wth 4th x test and fail to break 89SMA resistance.
Risk = 60ish. Reward = 100ish to IB level 1.3461

Trade 2:
Good TC off 21; what clinches it is tail up to 1.3676 (prev IT level). SL large @ 100 pips. Ideal entry order based on price retrace to prev IT on H1 reduces SL to 70pips. Target 1.3461. R:R = 70:150.

Trade 3:
Unfortunately this was the only trade I took, yet the weakest setup. Based on anticipated move off 1.3461 IB. Entered on morning star on H1. Main issues wth setup were:
- not a strong IB
- IB not visible on Daily TF so anticipation not for a big move.

Trade 4:
Tail testing 21EMA. SL for me would have been 100 pips (above high). Could have reduced to say 30 pips based on damage having already been done.
Could have potentially dropped to H1 for entries 4a / 4b:
4a) fails to close above prev IT (original H4 pin bar entry).
4b) No deal - this is an H1 entry well after H4 signal. Therefore need to look at new support (new IB just formed) on H1...R:R bad to this level.

Daily: Price in downtrend. As wth E/U, tails to topside show selling pressure. Yesterday 20 Oct candle confirmed rejection of 14 Oct IT, together wth lower high. Anticipation is short
H4: Anticipation is a TC short (1)
Won't be looking for any longs (2) unless price breaks up thru 89SMA, TL and 1.7492 IT

Update: Price fell as expected. No clear entry on H1 or H4

Hey Ben.
Did you see the Bearish engulfer on the Yen? It was a doozy. Couldn't break the previous high. Was a high probability to go south.

Price back at 100.10 IB. Will take a long trade if agressive TL on H1 is broken and IB level holds. Daily and H4 looking to produce 3 sisters setup if IB holds
Target is 102.10. May encounter resistance @ 101.60 newest IT

I missed it! Was a right infront of my eyes as well! For me, it was nice rejection of previous IT @ 102.10. 2nd engulfing came with MACD divergence, and could also see it as a S-H-S on MACD as well. My target would have been 100.10 - nicely hit for 150 ish pips. Glad you got it....hope one day I will be less blind. Not bad reward for 50pips risk.

Daily: Big pin off 21.
H4:
Long Scenario:
None, based on Daily Pin bar
Short Scenario:
Break beneath 21 and descending TL, followed by TC down. TARGET = 1.2592 IB

I'm struggling a bit with my filtering process wth nesting dolls, which is causing me to skip some good trades. E/U short trade today is perfect example....


There were several factors that added weight to a short trade:
1)Daily graph shows good pressure to downside with tails
2)Nice rounded PA / round toppy before signal candle
3)Solid IB level at 1.2600 – price often seems to be attracted back to retest the stronger IT/IB levels

I skipped this sell because of potential IB support at 1.2776 level - signal candle for a sell closed at this level. I passed because IB was nicely rounded (nice, concise support level). Now, I’m happy to pass on ‘winning’ trade because it doesn’t meet my rules, but too many rules or barriers can also overly limit trading. The question is, do I need to adjust my filters...are some of the NDs that I'm identifying too minor and getting in the way of good trades...and how do I filter the weak from the strong?

Traded the setup below yesterday and came out with a lucky escape, loosing 5 pips.
Reason for the trade was that on H4, price had come down to significant resistance area of 1.2592 IB, so I dropped to H1 and entered as shown.
SL was beneath 15 pips beneath low of signal candle and price ended up retracing 30ish pips beneath low - luckily I exited after 5 pips loss as lost confidence in strength of setup.

Pros: H4 @ IB level; MACD divergent over last 2 wks on H4...more immediate divergency showing on H1.

Trade critique: Tails on Daily showing downward pressure were a concern; not really the best setup on H1 - would prefer to see pin bar, engulfing, morning star, or some more testing of the support level given the daily situation. And the IB on H4 is not nice and clean - more of a zone...should have anticipated some deeper testing into the area.

Price did move as anticipated, but given the cons, I should have waited for more confirmation, or had a deeper SL

Daily: Price back @ 21 again. There is still a good pin from last swing high that remains unbroken - anticipation still down. There is a higher low that may signal trend weakening...will be watching over next few days to 3 sisters forming for long entry
H4: price back at 89 and TL resistance

Short Scenario:
Move off 89 / TL level. TARGET = 1.2670 (above major IB @ 1.2592)

Long Scenario:
1) Break above 89 / TL...will be watching for a breakout trade if this happens. TARGET = 200SMA. 1st TP around 1.3157 minor IT
2) Move down to 1.2592 IB with price encountering support. TARGET = 89

SL1 = 1.2899
SL2 = 1.3005
TP1 = 1.2559 (prev lows) and move SL2 to - TP1 to give room to move (price has broken converging triangle...looking for bigger move)

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hi,

FYI. The yellow vertical line indicates the time I made the entry.

1H chart: The black dotted line indicates the inside bottom. Also looks like a head & shoulder.

4H chart: At that time, MACD showed a RB pattern. I was also encouraged by the tweezers before. It found support on EMA365.

I also looked at the USDX chart. on 4H chart. There is a dark cloud, followed by a small doji. I expected it should fall back to the channel.

Therefore, I decided to long EUR and expected it to back to 21.
Cheers.
Fish

Hi Fish,

Sorry for my delay in getting back to you...as you know, I've had my hands full.
Some comments on your trade. To me, this is not a solid Inside Bottom setup because:

- I like to trade the 4hr and I don't see an Inside Bottom there. I would then look at dropping to the 1hr to look for entries based on 4hr resistance/support.
- I've included one of your charts again..is this the inside bottom you're referring to? I personally like to see more of a valley or ridge develop between the Inside bottom and where price then reacts off of it (I've marked in dotted blue what I would prefer to see). Then, if Risk:Reward justifies, I would enter.
- HOWEVER, what I do like about your chart is on H4 there is a morning star (you had tweezer bottoms) off the 365. I like the divergence on H1 (would definitely not have entered there without that divergence), and then where you entered price moved off what I would consider a H1 Inside Bottom (just would prefer to see a move more like the blue dotted line).
- What am I trying to say? The trade is not my interpretation of nesting doll setups (or not as clear a reaction as I would like), but it is possibly as less obvious nesting doll entry setup that may have good potential and if you end up backtesting more I'm interested to hear what you find.

I've also attached an E/U trade that I took as a short on 26 March. This is to illustrate how I'm currently trading Inside Tops / Bottoms. See how the top formed, then there was a nice move away from it to really allow the formation to develop clearly. Price then moved back up (forming a nice valley) and just touched the 1.3611 level. Little tails and small candles showed the top was going to hold.
I talked about this trade I was watching out for on the 4hr thread I think. See how its also the 3 little sisters formation - 3 lower highs in nice smooth succession. Always on the lookout for a confluence of factors.

Hope this helps show how I trade them.