4 Hour Strategy (MACD)

i do think market cud retrace a bit..in EU derez a sort of divergence in MACD as well...

best of luck NK..hope u catch more today... !

Hi guys...

After wrong decision yesterday on RB, which i got out at BE, then i took TC on EU with help of 1hr.

Gave me nice 40 pips.

E-1.4169
1st TP - 1.4130
2nd TP - stay with trend unless bulish candle close above 200sma

1st TP hit at 39pip

2nd closed at same place due to retracement..

Just an update here...

Still short the EU from 4387. Price has a gap to fill so we might see a pullback here at least back to the 8ema. I'm going to lock in some pips here and move my stop to just above the 50 retrace which is around 4230.

If you're not familiar with the principle of the Gap indicator visit:
http://www.fxtradeblog.com/plan.html
for more info.

Lot's of talk about rounded bottoms and tops so I'm going to step in for just a minute or two here...

During the first few months of the thread there was a lot of focus on the rounded tops and bottoms. If you go back over some charts you'll notice that these don't play out the way we would like them to all the time. Because of this Phillip stressed to focus more on the moving averages, support and resistance, and price channels and how price action reacts to those levels along with the moving averages. The MACD is still usefull during trending markets and during price channels, etc., but the MACD patterns became secondary, even tertiary to the moving averages and support and resistance levels. But, if you can recognize the price action along with the MACD and still feel comortable with the patters, by all means continue to use it that way. Otherwise, if things are working out to well, try focusing on the high probablility trade areas when the market is trending well and th epullbacks to the 21 are setting up....

Just my 2 pips.

This thread is really rockin' now. Thanks to all the people who are posting. Thanks Nassir and others for answering the questions.

I see Nassir has answered your question. I think that during the European session 40-45 pips is very small. You can get away with it during the Asian session but recently the Asian session hasn't given many trades.

I have a stop between 70 - 100 pips for EU but I never let my loss get that large. I close it beforehand if I am watching it.

The "big stop" is to prevent spikes and there are a lot of them during the European session. For example, your currency may move just because another currency is moving due to a news release. It would be unfortunate to be stopped out due to this so I have a bigger stop.

I think the best thing in your situation is to have a smaller lot and a bigger stop. It is best to backtest to see what suits your personality. For instance, some people like WG2000 have very big stops but that would not suit me even though it has been very successful for him. Good luck with your trades and I hope you catch a lot of pips.

Sounds like it could be a good move. Both EU and GU have hit their 200 SMAs and trendlines at the same time so I am expecting a bit of a retrace too.

I don't know about the yen crosses though.

Hello Everybody,

First and foremost, i would like to welcome you back Palmer.....it is always great to see you and your contributions here......

Sorry everyone, I have been busy these days and had trouble with my internet connection so I could not post anything. I also took advantage of that wave down on the EUR after price closed below 21 and after the retracement from the initial move I entered @ 1.41900 and closed my trade @ 1.41338 which was the 200sma on the 4H.......Now we might see a retracement back up to fill the gap as Palmer stated and we shall see if price is going to take down the 200sma or reverse and go back up........bias is to the downside of course but again, no one can predict the market.

As far as round top and bottoms........I agree with Palmer and many others have also emphasized this as have I that the MACD is secondary and maybe the last filter you will need to look at before entry.........round top and bottoms used with price action can be a great signal but if you are taking trades solely on round top and round bottom without recognizing price action and support and resistance lines, then you are just going in the trade blindly.........if you wait and take these round tops and bottoms by support and resistance lines, and taking into consideration the most and the main signal which is price action, then you raise your odds of success and those are your high probability trades.

Most emphasize is on high probability trades and if you can wait for those and the key word is WAIT then following the rules and taking the signal, you will make money and that is the hard part for many starting out is to WAIT and be patient as all new traders seem to have the need to be in the market at all times and more and more knowledge adn experience I acquire, i realize that you can do just a few trades a month or a few trades a week and have the same outcome as someone doing 10s or 100 trades a month.........

great start to a new week

happy pippin

Thanks palmer, Nasir, nerd, xeneric, fena, time1200 ...

can you guys please explain little more about PRICE ACTIONS .. what should i look into Price action ? Any philip video or pdf out there which can explain more?

thanks Gurus
shabbir

GU is totally rejected by a resistance line which I draw on the daily. will this be e signal for further downward movement?

Overall, the signal looks to be to the downside because of the wedge (brown lines) on the DAILY. In the very short term, there could be a small retrace because it has hit the 200SMA on the 4 hr and the 8 EMA on the 4 hr hasn't caught up yet.

The target will probably be at the blue line. That's my 2 pips worth.

There are various lesson by Philip price motion and market rhythm etc.

But you can't just read a post or a pdf and just know all about price action. It requires hundred's or maybe thousand of screen hours.

Start to observe price very closely when it's fooling around moving averages, Trend lines, Support/Resistance level's and Retracement's level's.

For an example price is near a trend line and you are anticipating a LONG entry for a breakout or a SHORT one for price turning from the trend line. So here no indicator could tell you that if price broke the line with authority and power or it just poorly managed to touched it. You just need to see it your self.

Price action..ee..hard thing to define...

wen i started trading few yrs back...i bought and read alot of material (like books, systems, etc.)...da idea of trading dat i learnt from most of the systems was (for e.g):

(1) If 5 EMA cross 21 EMA upwards and
(2) If RSI is above 50
(3) If MACD is in bullish mode and ADX is indicating a BUY and and and if dat indicator is also in bullish zone then:

BUY BUY BUY...

dis was trading based on indicators..u dont know wat price is doing..how for e.g. the price of euro is moving up and down n where itz making significant levels..nothing..u just push the trigger wen ur indicators line up..datz it...

i can very confidently say that i designed myself n tested about 20 such systems...most of them were profitable BUT for only a little while...for very short-term..

in contrary to dis...

Price Action trading is based on the movement of price of currencies...dat is how euro moved up or down...wat supports or resistances it made..? how much it retraced after moving up or how much it bounced back after hitting a level...so in simple words, Price Action is just the study of patterns forming on the price itself..not on any indicator...

wen i eventually realized dat PA trading was wat wud make me profitable, i came across dis thread...da idea here is to anticipate the movement of currencies by studying the price action using moving averages, market levels, patterns like triangles, channels etc. once u anticipate the market movement using rhythm analysis, u use MACD signals to pull the trigger... dat is u use MACD signals to confirm ur entry point in a certain stage of currency movement...datz it for the MACD..da rest of the story is btw Price action and market rhythm..

Just my view on PA...

OK guys be careful with you SL and TP if you are trading in this ZONE. (see the circle in pic below)

Here is an example on the Eur. Price seems to have found support on the trendline indicated by the arrows. If you take it down to even the 1 hr or 5 min, you can see price stalling. Let's see what happens

Good eye Morelands...I've kind of got the same thing on the 4hr as well:

I've moved my stop just above the 89 here. Price has stalled and we have filled the price gap with the 8ema and we are hovering around the 38.2 retracement level. You can see that price tested the 23.6 level which is also the 200 moving average and could not break to the downside. This is happening with the Dow pulling back as well. If we break down below the 200 and the 23.6 this could signal the bulls trying to get back into the stocks...only time will tell.

Price Action:

This is a really fancy phrase for how price reacts around s/r levels, fib #'s, the 21 or 8ema, etc. There are some people that really are masters at reading candlesticks and can point out 'three black crows' 'shooting stars' and other cool terms while glancing at the charts but in the long run all price action is, is, how the market reacts to certain significant areas on the charts. Right now, as Morelands stated, price action has stalled and I agree. Also, remember the Fed is meeting tomorrow with an interest rate announcement so there's the reason for the stall = news, major news coming out. So, when someone uses 'price action' it's all a matter of how price is reacting to a significant chart area.

Sitting back and waiting for the news.....

I agree with you Moorlands and Palmer, I have the same thing on my charts as well and also the GBP's charts are very similar to that of the EUR as well. I wanted to point out a few things for those new to the forum and also since we have been talking about price action in the last few days. On the Daily chart of Eur/Usd, i have taken out the indicators that I use which the same that Moorlands and Palmer have on their charts so I thought we can just focus on the price action of the pair. As you can see i have drawn up pretty much the same trenlines that you might have on your charts and I have also included a few number here and I will explain those in a minute.

I would say we all would agree that this is an uptrend and how can we judge that other than the fact that the trendlines seem to be pointed in a up slope. Well as you can see the grey circles play a big factor here and so do the blue rectangles. As you can notice everytime price went up, it retraced back down making a lower high (grey circles) and price would then continue up again and this is the important part (making a higher high)-blue rectangles. So as I see it, price has been making higher highs and higher lows thus in an uptrend.

for those that study or are familiar with Elliot wave theory (where price does not just go up in a straight line but in ziz zag) In short price goes up in waves usually it goes up in 5 so taht is why I have labelled those numbers on the chart which happen to be in that nice channel.........Now this price action can happen in 5 waves in higher time frames and if you go down to a lower time frames you can find smaller 5 wave trends within the higher time frames......You can notice from 1 to 2 there is a nice smaller trend with a 1 to 5 waves and then continuation to the upside. you can also see the same wave structure from 2 to 3 and so forth.

So now to interprete price action for a possible trade, as moorlands and palmer have stated, price has stalled and I agree and as you can see the last grey circle is sitting on a trend line which happens to also be on the 200sma on the 4H (see palmers chart). Also that cirle has not made a lower low from the previous low. Thus still making higher lows. Now if price takes that previous low out around 1.40000 which happens to also be a very strong psychological round number, then in my opinion we will see a good momentum push to the bottom trend line. Also as our rules, you can see price closed below 21ema and as our rules states, price may go back to the 21 and then down to the 89sma. These are all posibilites.
Another possibility could be that price will stall on that trend line and find itself a reversal and go back up again.....

Again PATIENCE PATIENCE PATIENCE.........no one can predict the markets.....i listen to all these so called economic gurus, so called portfolio managers speak and they do not have a clue what will happen to the markets, all they can do is the same as you and I do, just wait and see.......half of them say dow will be up and the other half will say it will go down and when it does occur, the one half will say i told you so and another time around will the other group guessing the right way..........its just mind blowing to me that these are the people that get paid to come and speak and get journalistic jobs........Again it is not how you can predict the market but how you can react to the price action of the market and how you manage that price action.......These portfolio managers might not know what will happen to the markets but they manage money and the key word here is manage..........And it comes to show you that trading isn't all that hard, I mean you don't have to be an intellectual guru to be a trader but you need to be a good money manager. If you can interpret price action and stick with your rules and wait for the trend and wait for high probability trades while practicing money management..........I could guarantee that 9 out of 10 will be profitable and can do this for a long period of time.......

MONEY MANAGEMENT IS TRUELY WHAT SEPARATES THE PORTFOLIO MANAGERS, THE FULL TIME TRADERS FROM THE REST OF THE PACK.

It has taken me many years to see that it was not my methods or lack of knowledge but the simplest thing which happens to be money management and discipline. With those two, even if you have a so so system, you will make money with correct money management...........

If you have any questions, please message me or ask me.

I heartly thanks to all here specially Palmer, nasir, nerd, morland, xeneric, time1300 for their very nice explanation on PA.

It's true that sometimes we have to put all indicator aside and focus on PA.

Basically we have to look for OBVIOUS pattern.. Some patterns which every pro traders sees.. S/R MA, where price stalls, what's major news coming next etc..

looks like today will be very crucial day to decide whether EU and GU will continue up as up trend or will go down to kiss 89ema.. It all will be based on Good or Bad news for Dollar..

thanks a lot
shabbir

Hi all,

Anyone looking to long the USDJPY on the current 4hr bar. stoploss below the 89 MA 1st profit just below the 21 MA. Did not trade today as the US Int Rate coming out later.

let me know what you guys think on the trade that I would have taken if not for the Int rate.

Regards,

Andrew Nair

Hi All,
Just before heading to bed for a couple of hours and to anticipate the big news conference later today......I wanted to just look at the Eur/usd chart (4H). Price did come down to the lower trendline but has since bounced off with a hammer like engulfing candle with MACD divergence as well.......if there were no new announcements, I might have taken the odds on this one as price has tested the trend line 3 times and has failed to close below it. the strong candle as well with the divergence might give me reason to take on the odds but then again I do not trade if a big news conference is coming out and I rather wait to see what happens.

As far as the USD/JPY........I think that is a strong bullish candle on the 4H and in my opinion the last few days, the japanese yen has been moving pretty erratic and I think i there are other currencies where I would have a higher probability trade as the USD/JPY pair. Just my 2 cents. One main reason is that the moving averages are bunched up together here on the 4h and daily charts and in my opinion I would wait for a more clear direction...........but that is not to say you would not be profitable... you might very well be if you took on that trade............

Don't know about UJ.

What about the "beauty and the beast" budy.

Double bottom on EJ and some thing same in GJ in 1H

and of course anticipation for RB's on 4H.