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4 Hour Strategy (MACD)

  • #3,501
  • Apr 17, 2007 3:41am Apr 17, 2007 3:41am
Those who went long gbp/usd at 8GMT long signal should be very happy now.

It sored high to stop just shy of 2.00.

I am now watching for possible eur/usd TC signal.
  • #3,502
  • Apr 17, 2007 7:44am Apr 17, 2007 7:44am
RickyPluto:

Thanks for the info on the USDJPY..took the rt down then back up from the tc at the bounce on the 21...

My email test with MT4 is still F@#%$&!
  • #3,503
  • Apr 17, 2007 11:16am Apr 17, 2007 11:16am
Head and shoulders forming on GBP/JPY? Crossover on USD/JPY? I'm always wary shorting JPY pairs...

Awesome TC signal on cable last night (04.17 04:00), netted 80 pips (had TP set at 2.0000) out of 150... can't complain.

Rob
  • #3,504
  • Apr 17, 2007 12:22pm Apr 17, 2007 12:22pm
Quoting RobKnight6
Head and shoulders forming on GBP/JPY? Crossover on USD/JPY? I'm always wary shorting JPY pairs...

Awesome TC signal on cable last night (04.17 04:00), netted 80 pips (had TP set at 2.0000) out of 150... can't complain.

Rob
Rob,

I see more of a double top (lower high) pattern on the gbp/jpy, but I'm wary because it's in an uptrend. Also, I'm looking for a bounce back up through zero on the u/j, as it's in a current uptrend and the price right now is close to the bottom of the channel.

Also, I can just smell a zero bottom bounce in the EURJPY sometime in the next few hours...
  • #3,505
  • Apr 17, 2007 12:25pm Apr 17, 2007 12:25pm
This may be an obvious question for most of you, but I want to verify that my logic is right here.

So, a double top pattern where the second is a lower high than the first is an indicator of a downward price movement in the works, right? Well, wouldn't this signal be much stronger in a downtrend than an uptrend? It seems that in uptrends these bearish trends tend to flatten out the price level before the next bullish run, rather than significantly bring it down. Am I correct here, that a lower high (double top) is stronger in a downtrend and a higher low (double bottom) is stronger in an uptrend?
  • #3,506
  • Apr 17, 2007 12:38pm Apr 17, 2007 12:38pm
Quoting JoshDance
This may be an obvious question for most of you, but I want to verify that my logic is right here.

So, a double top pattern where the second is a lower high than the first is an indicator of a downward price movement in the works, right? Well, wouldn't this signal be much stronger in a downtrend than an uptrend? It seems that in uptrends these bearish trends tend to flatten out the price level before the next bullish run, rather than significantly bring it down. Am I correct here, that a lower high (double top) is stronger in a downtrend and a higher low (double bottom) is stronger in an uptrend?

That's my understanding Josh. Although if the price is close to some resistance and/or there is substantial space between the 21EMA and price, a countertrend trade is worthy to be initiated since there's a good amount of pips to be made before the price finds further trend support. (Kinda like where the GBP/JPY is sitting right now... close to trendline with +/-80 pips to 21 EMA).

I hope that's not confusing, but that's how I understand it . Thanks for for clarification on the GBP/JPY. I wasn't sure if the first "shoulder" would actually be considered a shoulder.

Rob
  • #3,507
  • Apr 17, 2007 1:07pm Apr 17, 2007 1:07pm
PALMER and PIPS4UANDME:

I'm glad some of you guys made cash on the yen shenanigans! USD/JPY looked like a more concrete formation in the end. I myself chickened out of the whole deal because of the going-against-the-trend-thing, like Pips4uandme said, and like JoshDance articulated a little while ago. Also, couldn't get onto the forum because of the whole forexfactory hacking incident(s).
The most beautiful round top you can imagine, against the trend, can still go sideways and then up!

I'm off to scavenge on the 5min charts until the next big wave rolls in. My trusty crystal ball says it'll be an RB on the USD/JPY (with the trend!). Wishful thinking never hurt anyone.

-Ricky.
"My main objective is to be professional but to kill him." - Mike Tyson.
  • #3,508
  • Apr 17, 2007 3:22pm Apr 17, 2007 3:22pm
Hi folks,

I know Phillips system works very well as it is, but what about considering confirmation of a possible trade with another currency pair.

I'll give you an example:

I went short on Cable at 2.0070. Now I know that MACD is still giving a trend continuation on cable, so it should be a no-trade, However, GBPJPY is giving a head and shoulders.

As today's action is all about the pound, I wonder if looking at MACD signals from all the GBP currency pairs is a good idea.
Either:
1. Using MACD signals from one pair to confirm whether to trade with another.
2. Using MACD signals from all pairs to confirm whether to enter a trade.

Option 1. might get us into a trade earlier, as it has done for me at time of writing.

Of course, now I've gone short, Cable is bound to go up
If it's too good to be true, it probably is.
  • #3,509
  • Apr 17, 2007 3:37pm Apr 17, 2007 3:37pm
not the highest its ever gone, expect more if we continue to get dovish numbers. lookout for the minutes tonight at 430 est.
The British pound is trading at 15 year highs and the burning question on everyone's mind is "How Much Further Can it Rise?" In our opinion, quite a bit. The last time the currency was trading at this level against the US dollar was right before the country’s withdrawal from the Exchange Rate Mechanism (ERM) and things were much different then than they are now. The UK economy is now on a far stronger footing with a low risk of a major reversal. The prior strength that we saw in the British pound in the early 90s was for no reason other than the overvalued fixed parity rate against the deutschmark that Britain had undertaken as a part of the entry into the ERM. We all know how disastrous that turned out to be with the infamous Black Wednesday occurring two years afterwards.

Surge in Inflation will Force the Bank of England to Raise Rates

This time around, the rally in the British pound has been triggered by the currency market’s obsession with countries that need to increase interest rates. For the first time ever, Bank of England Governor King has written an open letter to the Chancellor of the Exchequer Gordon Brown explaining why inflation has surged beyond 1 percent of their target rate. This morning, annualized
consumer prices for the month of March hit 3.1 percent. Full letter available here:
http://www.bankofengland.co.uk/monet...tter070417.pdf

Brown credits the move to the rise in food and energy prices as well as the near 10 percent jump in home furnishings. The housing market continues to perform well with the latest reports revealing increases in house prices. Such strong demand has led many businesses that are tied to housing to increase their own prices as well. The BoE continues to back their belief that consumer prices will drop significantly over the next few months and fall below their 2 percent target by the end of the year. However, with oil prices holding steadily above $60 a barrel and the economy still performing well, the only way that this can be achieved is through a strong currency and higher interest rate. We fully expect King to back his words with action. The futures market is already pricing in a quarter point rate hike in May, as well as another rate hike in the third quarter, which would bring the yield on UK rates to 5.75 percent. The outlook for higher interest rates provides a strong fundamental basis for further gains in the currency pair.

Next Significant High Still 4000 Pips Away

As seen in the Bloomberg chart below, the next significant high in the GBP/USD is still 4000 pips away. On a shorter term basis, we would have to first clear the September 1992 high of 2.0100. Divergence in intraday and daily technical oscillators suggests that there could be a risk of a reversal, but that may just provide an opportunity to buy on dips.

http://www.dailyfx.com/export/sites/...sd041707_1.gif

More Data to Spark Gains This Week

With the minutes from the Bank of England monetary policy meeting still due for release along with employment and retail sales data, there are sufficient fundamental catalyst to fuel further gains. The market needs validation that there was a more hawkish voting record at the last monetary policy meeting to confirm that the next move will come in May. If the votes remain at 8-1 with the one dissenter (Blanchflower) still favoring a rate cut, expect to see the GBP/USD slip back below 2.0 like a falling knife because this will signal hesitancy within the policy committee. Any sign of weakness as the currency pair attempts to develop a solid footing above that key level could trigger a wave of profit taking. Therefore we need to first see evidence that the labor market remains strong and consumer spending steady.

Taking Cue from the Euro

Oftentimes traders will get nervous at key psychological levels and wonder whether the currency pair can hold above those levels. A look at the EUR/USD’s past price performance could provide some clues. The last time the EUR/USD rallied above 1.30 from much lower levels was in Nov 2006 and Nov 2004. Both times, a breach of 1.30 led to much stronger gains with virtually little retracement in the days immediately afterwards. Therefore a break of 2.00 could actually be quite positive for the currency in the medium term.

http://www.dailyfx.com/export/sites/...sd041707_2.gif

< Prev Next >
  • #3,510
  • Apr 17, 2007 3:40pm Apr 17, 2007 3:40pm
Just thought that I would try a bit of hindsight/foresight analysis for the fun of it. The USD/JPY has been trading within an up channel in the 4 hour time frame for a while now and is currently approaching the bottom of that channel. Nearby, I also see a confluence of both the 89 and 365 MA's. This is also a previous breakout (118.40ish) area where prior resistance has been acting as support and may do so once again ....hmmm. A confirmation of the MACD could be a good entry for a move to the upside in a trend friendly manner. If that proves to be the case, I would suspect that this time current resistance at 119.85ish may be threatened and we could see a move into the tops around 121.65. The daily chart also gives a good view of these support/resistance areas.

Should support in the 118.40ish area give way then all bets are off and we may want to reverse our outlook. More thoughts and analysis always welcome.

P.S Can't seem to attach charts at the moment so will wait until forex factory sorts things out.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #3,511
  • Apr 17, 2007 3:54pm Apr 17, 2007 3:54pm
Quoting fxpertno1
not the highest its ever gone, expect more if we continue to get dovish numbers. lookout for the minutes tonight at 430 est.
The British pound is trading at 15 year highs and the burning question on everyone's mind is "How Much Further Can it Rise?" In our opinion, quite a bit. The last time the currency was trading at this level against the US dollar was right before the country’s withdrawal from the Exchange Rate Mechanism (ERM) and things were much different then than they are now. The UK economy is now on a far stronger footing with a low risk of a major reversal. The prior strength that we saw in the British pound in the early 90s was for no reason other than the overvalued fixed parity rate against the deutschmark that Britain had undertaken as a part of the entry into the ERM. We all know how disastrous that turned out to be with the infamous Black Wednesday occurring two years afterwards. < Prev Next >
2.0110 seems to be the highest back to 1992. We have to go back even further to the 1980's to see the currency at really heady heights! Brick-phones, braces, champagne, city wide-boys and Margaret Thatcher

Just my tuppence worth, but we place great value on the property market here in England. Everyone's pensions are tied up in it.

Now if interest rates go too high too fast, the property market will crash. And Gordon Brown wont want that if he is to become Prime Minister. I'm sure tomorrows interest rate rise is on the cards, but I wouldnt be suprised if he is having secret talks with the Bank Of England before the next one.
If it's too good to be true, it probably is.
  • #3,512
  • Apr 17, 2007 4:10pm Apr 17, 2007 4:10pm
why is it i can only see the last page of this thread and not any other pages. when i click on first page it just shows a blank white page?? anyone else having the same problem?
  • #3,513
  • Edited 4:49pm Apr 17, 2007 4:32pm | Edited 4:49pm
Going long on EUR/JPY. I'm being a bit impatient and entering now, because 1-hr confirms a round bottom, and a 4-hr looks pretty sure of a zero bounce back up (or close to it), and we're at the bottom of a trendline and right on the 89SMA. So, I'm going for it. May hastiness not bite me in the ass.

EDIT: Going back on my word, and closing this at breakeven. On further inspection, the 1-hr chart shows a nice falling double bottom pattern over the last 30 hrs or so. I think I'll wait till early tomorrow for more confirmation.
  • #3,514
  • Edited 1:23am Apr 18, 2007 12:58am | Edited 1:23am
Quoting SimonK
Hi folks,

I know Phillips system works very well as it is, but what about considering confirmation of a possible trade with another currency pair.

I'll give you an example:

I went short on Cable at 2.0070. Now I know that MACD is still giving a trend continuation on cable, so it should be a no-trade, However, GBPJPY is giving a head and shoulders.

As today's action is all about the pound, I wonder if looking at MACD signals from all the GBP currency pairs is a good idea.
Either:
1. Using MACD signals from one pair to confirm whether to trade with another.
2. Using MACD signals from all pairs to confirm whether to enter a trade.

Option 1. might get us into a trade earlier, as it has done for me at time of writing.

Of course, now I've gone short, Cable is bound to go up
Hi Simon,

Very interesting way of looking at the market based on correlations...Keep in mind that pairs don't always stay correlated every single day...so on the occassion when they decide to diverge, you may get stuck holding a bad trade. The only way to know for sure if it works is to keep testing it..both backwards into history, as well as forward.

Now, I am going to sound very stupid...and I know our charts differ b/c of the time of candle closing...but is this really a head and shoulder pattern on GBPJPY? I am watching for confirmation of price failure w/would indicate a contertrade....but I'd rather see TC at Inside Top or Inside Bottom bounce...

Here's my chart...Is the MACD really forming a weird H & S? or are we looking ahead 24 hours anticipating the H & S?

Thanks,
Pips
  • #3,515
  • Apr 18, 2007 1:01am Apr 18, 2007 1:01am
FxPertNo1,
The Sept 1992 H2.0100 just hit......bring out the beer. Can we hold the bubbly and our breath for that 4000! Challenge Bloomberg or get in the Bullride?!
CSizzler***
  • #3,516
  • Apr 18, 2007 1:22am Apr 18, 2007 1:22am
Quoting fxhermit
Just thought that I would try a bit of hindsight/foresight analysis for the fun of it. The USD/JPY has been trading within an up channel in the 4 hour time frame for a while now and is currently approaching the bottom of that channel. Nearby, I also see a confluence of both the 89 and 365 MA's. This is also a previous breakout (118.40ish) area where prior resistance has been acting as support and may do so once again ....hmmm. A confirmation of the MACD could be a good entry for a move to the upside in a trend friendly manner. If that proves to be the case, I would suspect that this time current resistance at 119.85ish may be threatened and we could see a move into the tops around 121.65. The daily chart also gives a good view of these support/resistance areas.

Should support in the 118.40ish area give way then all bets are off and we may want to reverse our outlook. More thoughts and analysis always welcome.

P.S Can't seem to attach charts at the moment so will wait until forex factory sorts things out.
Nicely done, as always FXHermit! I'm with you on the long analysis (except I have some res. areas in the way before 121.65...first 120.19, then 120.35/45, then 120.95). But, I also know you look further ahead then I do and have more patience to let trades run .

My "loosely" woven plans are if price closes above 118.64 w/RB then long or if price fails at 118.93 w/TC on current pattern, short may be in the cards....and the 118.40 -118.22 price area will give us all time to think about what lies ahead, eh? (failure of 118.22 w/MACD down confirmation, will for sure give me a sell sign).

Thanks again for your predictions! You are a very wise hermit....like Yoda!
  • #3,517
  • Apr 18, 2007 1:48am Apr 18, 2007 1:48am
Quoting pips4uandme
I'm in agreement w/you that these pairs look like they are ready for retrace...but be very careful! Talk about momentum pushing the price up on the yen pairs....Just confirm price action before taking a counter trade and keep your stop tight (and don't get greedy )! If you really wanted to be safe...wait for a TC after a retrace and ride w/the trend instead of hopping into counter trend trade. Also, you might want to use 1 set of data instead of mixing platforms and use a 1 hour timeframe along with the 4HR. That way you won't get conflicting info that could confuse your decision to enter...For me, too much info gives me "action paralysis," and I can't pull the trigger.

Wishing you happy trading (and many pips!)
Hi Ricky,

I got a PM from a very wise "newbie" who really isn't so green. I didn't realize that I had influenced individual traders not to take the yen shorts yesterday. This was not my intention, and I apologize. At the time I wrote the reply, my candle had closed only 1 hour previously that I was basing my writing on..and yes, it was a possible RT....when I wrote the post, failure of the Top Pattern hadn't been confirmed yet. I use price action first, then confirm it w/MACD. So, even though a RT looked possible, Price didn't confirm short at 10:00AM PST...17:00GMT. My message was to confirm price failure before trading short, not "don't take a short."

A short was confirmed on E/J on the close of my 5PM PST candle...0:00GMT. and the MACD had a beautiful Round Top! I didn't take the trade either...I missed it. But, one of the best forex traders/analyst I know, someone I respect immensely (does anyone hear the Roar of a piggy?), saw that trade setting up immediately!! And took it when price failure confirmed.

So...my message is...I'm sorry if I dissuaded anyone from there plan. Please always listen to your own analysis. I am only being cautious and presenting my view on looking at the market. Ricky saw a beautiful (and good level...which I missed completely...after asking the question... ) round top and a great contra trade..Nicely done.

Pips
  • #3,518
  • Apr 18, 2007 2:51am Apr 18, 2007 2:51am
Quoting pips4uandme
Nicely done, as always FXHermit! I'm with you on the long analysis (except I have some res. areas in the way before 121.65...first 120.19, then 120.35/45, then 120.95). But, I also know you look further ahead then I do and have more patience to let trades run .

My "loosely" woven plans are if price closes above 118.64 w/RB then long or if price fails at 118.93 w/TC on current pattern, short may be in the cards....and the 118.40 -118.22 price area will give us all time to think about what lies ahead, eh? (failure of 118.22 w/MACD down confirmation, will for sure give me a sell sign).

Thanks again for your predictions! You are a very wise hermit....like Yoda!
Yup, I like your "loosely" woven plans, they are the best kind. I always have to remind myself that some of the best trades that I have had in the past are the ones where I have managed to "cobble" out both sides of the trade and then patiently waited for the market to come to one or the other.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
  • #3,519
  • Apr 18, 2007 4:14am Apr 18, 2007 4:14am
I have trolled and trolled these pages (obviously not all of them) for chart examples of the nested dolls and other EXOTICS mentioned by DireXiv.

I can find references and posts with charts and questions

EX:

"Tamkras, is this a nested doll?"

But no examples of nested dolls (or other exotics, for that matter).

Can anyone point me to the correct page?


Cheers!
  • #3,520
  • Apr 18, 2007 4:56am Apr 18, 2007 4:56am
Quoting pip_bagger
I have trolled and trolled these pages (obviously not all of them) for chart examples of the nested dolls and other EXOTICS mentioned by DireXiv.

I can find references and posts with charts and questions

EX:

"Tamkras, is this a nested doll?"

But no examples of nested dolls (or other exotics, for that matter).

Can anyone point me to the correct page?


Cheers!
Hi pipbagger,

You can check post #1710 & #1711 for their examples. At that time of posting, Tamkras did not have a name on it. It is a description on the price movement, not MACD pattern.
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