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4 Hour Strategy (MACD)

  • #22,041
  • Mar 10, 2010 3:07am Mar 10, 2010 3:07am
Quoting ejiexe
Anybody taking this TC away from 89ma. Philip has told us that TC away from 89 and 200 is always a strong move so let see how this play out.
No but I took the TC on GU and bounce off 8 EMA. Am up 75 pips and still holding.
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  • #22,042
  • Edited 5:09am Mar 10, 2010 4:57am | Edited 5:09am
There have been some good TCs today. UJ bounced off the 21(red) and closed above the 8 (orange) with a strong hammer. There was also good support there. This was accompanied by a BOZ (bounce off zero) TC on the macd.
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  • #22,043
  • Mar 10, 2010 6:15am Mar 10, 2010 6:15am
Quoting xeneric
No but I took the TC on GU and bounce off 8 EMA. Am up 75 pips and still holding.
Wild ride so far
  • #22,044
  • Mar 10, 2010 8:19pm Mar 10, 2010 8:19pm
Here is the trade I took late last night. It was a TC on the 4hr chart, see the red arrow. You can notice the red horizontal line above my entry candle. You can see that this price level played a key role earlier in this consolidation period. My entry was a little early...good for approx 10-15 pips. My entry was much prettier than my exit b/c a man has to sleep, although I woke up 2x during the night to check on things. I closed 1/2 for 50 pips b/c I did not like the strong pullback. The second chart is the price action on the 30 min candles. You can see the strong move down leading to the #1 (notice that the #1 is also where the lower horizontal line is on the 4hr) and then a retracement. If price were going to go lower after the retracement it was going to have to go lower than the #1, but it did not, hence the #2. If I were around my computer at the time I would have closed around the #2. But I was not and closed the second for approx 40 pips. It is hard to manage some of the trades based on my schedule, but I can't change that and I have to learn how to deal with it until my circumstances change. Anyways, I hope this helps others understand price action
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  • #22,045
  • Mar 10, 2010 9:08pm Mar 10, 2010 9:08pm
Quoting ejiexe
Anybody taking this TC away from 89ma. Philip has told us that TC away from 89 and 200 is always a strong move so let see how this play out.
Hi, I took this trade but it reverses back up...I find that TC trades are quite difficult to trade. Could this be a low probability trade because there are lots of support below?
  • #22,046
  • Mar 11, 2010 12:50am Mar 11, 2010 12:50am
Quoting wuming79
Hi, I took this trade but it reverses back up...I find that TC trades are quite difficult to trade. Could this be a low probability trade because there are lots of support below?
We can say that it is a TC signal, but is it really a trend continuation pattern?

To trade TC's is very easy when there is trend, the angle of the price is good and it is running up or down.

Here price goes all around 21 and 89, and it means there is no trend, it is range. In range we should trade out of its boarders.

Currently the range is narrowing, which means one - the last trade out of the boarder might be false, but the breakout should be really big, so we must be prepared.
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  • #22,047
  • Edited Mar 12, 2010 4:19am Mar 11, 2010 3:27pm | Edited Mar 12, 2010 4:19am
Quoting ira
We can say that it is a TC signal, but is it really a trend continuation pattern?
Agree. None of the TCs that we took recently were part of a strong daily trend. Even GU which I thought was going to make another leg down was actually in the midst of forming a double bottom. EU daily has been in a range for a while and the moving averages were coming together on the 4 hr and UJ is also in a range.
  • #22,048
  • Mar 11, 2010 3:32pm Mar 11, 2010 3:32pm
Quoting ira
Currently the range is narrowing, which means one - the last trade out of the boarder might be false, but the breakout should be really big, so we must be prepared.
Yes, I 'm waiting for that big breakout.
  • #22,049
  • Mar 11, 2010 4:32pm Mar 11, 2010 4:32pm
Quoting xeneric
Agree. None of the TCs that we took recently were part of a strong daily trend. Even GU which I thought was going to make another leg down was actually in the midst of forming a double bottom. EU daily has been in consolidation for a while and the moving averages were coming together on the 4 hr and UJ is also in consolidation.
I thought the GBP was going to make another leg down too. The daily was showing a TC also. Add that to the TC on the 4hr and it's a good trade, just not as profitable as we would have liked.
  • #22,050
  • Mar 11, 2010 8:15pm Mar 11, 2010 8:15pm
Quoting xeneric
Yes, I 'm waiting for that big breakout.
Will the 4hr system be quick enough to catch a breakout? What might be the MACD signals when breakout happens? Zero Break pattern? The other patterns looks like reversals signals. Continuation patterns also looks like will need the price to retrace a little before it shows TC.

I think my psychology is screwed up :-( Hope to get some lights here.
  • #22,051
  • Edited Mar 12, 2010 4:17am Mar 11, 2010 9:03pm | Edited Mar 12, 2010 4:17am
Quoting wuming79
Will the 4hr system be quick enough to catch a breakout? What might be the MACD signals when breakout happens? Zero Break pattern? The other patterns looks like reversals signals. Continuation patterns also looks like will need the price to retrace a little before it shows TC.

I think my psychology is screwed up :-( Hope to get some lights here.
Yes the continuation pattern (TC) always follows a pullback but we only use the macd signal as a confirmation. We try to trade according to price action which means having an understanding of candlestick patterns. If you want to get to know the system better, you should watch Welshguy2000's videos which are very good. Just look him up on this thread and his videos start after May last year.

As for the breakout, we just use conventional breakout techniques here. You should read Phil Nel's post because they are very good and also cover breakouts.
  • #22,052
  • Edited 9:29pm Mar 11, 2010 9:15pm | Edited 9:29pm
Quoting Morelands
just not as profitable as we would have liked.
Agree.
  • #22,053
  • Mar 12, 2010 3:47am Mar 12, 2010 3:47am
Quoting wuming79
Will the 4hr system be quick enough to catch a breakout? What might be the MACD signals when breakout happens? Zero Break pattern? The other patterns looks like reversals signals. Continuation patterns also looks like will need the price to retrace a little before it shows TC.

I think my psychology is screwed up :-( Hope to get some lights here.
No, probably you won't get a MACD signal. But this whole strategy is not about signals. Phillip has taught us the greatest method of reading the market and market conditions. And if you know this, then you will know how to trade. MACD is only the trigger, and there will be the moment when you won't need it. Because you anticipate what the market might do, and when you see it doing it, you just open the trade.

Phillip has given us all the tools. First, ask yourself: what do I see in front of me? Is it trend, when the price is running quickly with retracements to the 21 or 8? Is it sideways, when the price is running around MA's, the MA's are all close together, interlaced? Or is it a consolidation, when the price is doing absolutely nothing, like sleeping?

Then according to you answer you will trade. If it is trend, then wait for the pullback to the 21 or 8 MA and take a TC. Don't try to pick highs in an up-trend and lows in the down-trend because you will be killed.

If you see that all MA's are interlaced, then try to define the boarders of the sideways channel and then wait for RT or RB or DT/DB at this levels, better with a tail conformation. The tail should penetrate the level, but the close should be inside the channel. Take the trade to the other side of the channel.

Is the price is sleeping then do nothing. There is nothing worse then to be in the dead market. Wait for the patter to develop, like flag or triangle and then take the breakout.

When you know what the price might do, just sit and wait for it to do it. Easy! If you don't know what the price might do, or it's not doing what it should, then stay out of the market until the situation gets clear.

As for the breakout, there are many ways to trade it. But the best way was taught by... guess who? - that's right Phillip! You have your line, go to the lower timeframe, 1h, wait for the price to break it, close above it, then retrace to the breakout level, when resistance becomes support, and then open the trade.

And don't forget, sooner or later the trend, the sideways, the consolidation will end. Look for the signs. In a trend it is divergence and break of the 21. In sideways it is the break of the channel. And that's where you might be wrong one time, but and quickly adapt to the new market conditions.
  • #22,054
  • Mar 12, 2010 4:14am Mar 12, 2010 4:14am
Here is the trend.
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  • #22,055
  • Mar 12, 2010 4:15am Mar 12, 2010 4:15am
Ira,
It has been a (long) while since I saw a post in a forex forum where a trader really understands a system and is able on top of that, to clearly and simply explain not only the strategy but also the subtle nuances which are a 'sine qua non' for a successful trading.
I am aware of both Philip's threads where of course Philip has done a heck of a job not only because he managed to teach to a lot of new traders a system which is viable but mainly because he tried to make them understand that a great deal about trading successfully is about the rhythm
So although I do not use Philip's systems (well, many parts are inevitably there), I just wanted to say that the way you answered really got my attention and is to be commended as a shining example of 'healthy' traders.
  • #22,056
  • Mar 12, 2010 4:16am Mar 12, 2010 4:16am
Here is the sideways.
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  • #22,057
  • Mar 12, 2010 4:17am Mar 12, 2010 4:17am
And the consolidation, the terms can differ, but the core is the same.
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  • #22,058
  • Mar 12, 2010 4:22am Mar 12, 2010 4:22am
And that is what I said about the breakout, see the pullback? I was even a bit late, as I was out.

But I am at the breakeven now and partially closed, so it is a free ride - my favourite!
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  • #22,059
  • Mar 12, 2010 6:03am Mar 12, 2010 6:03am
Quoting Yannis
Ira,
It has been a (long) while since I saw a post in a forex forum where a trader really understands a system and is able on top of that, to clearly and simply explain not only the strategy but also the subtle nuances which are a 'sine qua non' for a successful trading.
.....
Ira, I'm absolutely in agreement with Yannis.
And in my opinion, such a replay from a "21-posts since 2004" has more value then any voucher... :-)
  • #22,060
  • Mar 12, 2010 8:45am Mar 12, 2010 8:45am
Quoting ira
No, probably you won't get a MACD signal. But this whole strategy is not about signals. Phillip has taught us the greatest method of reading the market and market conditions. And if you know this, then you will know how to trade. MACD is only the trigger, and there will be the moment when you won't need it. Because you anticipate what the market might do, and when you see it doing it, you just open the trade.

[color=black][font=Verdana]Phillip has given us all...
You know this stuff don't you.

Good luck my friend.
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