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4 Hour Strategy (MACD)

  • #22,061
  • Mar 12, 2010 9:38am Mar 12, 2010 9:38am
Thank you very much guys, it takes a lot of work, but it is a pleasure when you are there .
  • #22,062
  • Mar 12, 2010 9:50pm Mar 12, 2010 9:50pm
Ira, what you stated about trending markets vs consolidation vs breakout was a great explaination and something that took me a while to understand and I'm still learning. Great trade by the way. I wanted to share with others another way to trade a break out. It is best explained by WG's video dated Nov 20. The 1st chart is the daily and shows the resistance line, see red arrow. The second chart is the 1hr. The wave from inside the breakout to the outside is fib'ed' in pink. Price pulled back to the 61% and 21 MA with 2 hammers. Price now seems to be supported by the 8 EMA. I'm looking to take profit at te 121% or 138% if all goes well. Have a nice week-end
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  • #22,063
  • Edited 10:28am Mar 13, 2010 10:09am | Edited 10:28am
Quoting ira
Thank you very much guys, it takes a lot of work, but it is a pleasure when you are there .
Wow, thanks man. That's very enlightening! :-) btw, the 4 Hour system MAs, are they workable in other pairs? I see that the MACD is not as good as EURUSD but sounds like if we just use MA to trade, we won't need the MACD?

Oh and Btw 2, I heard from Philip's record that he also trades equity. Does anyone knows if he uses the same set of indicators and MAs on his equity charts?
  • #22,064
  • Edited 10:50pm Mar 14, 2010 10:38pm | Edited 10:50pm
My CT trade on AU this morning. I'm still trying not to take a CT trade but this one is hardly to resist!
Reason to CT AU:
1. Price has been in previous support in 2010.01.12 20:00 & 2010.01.18 04:00. I don't know if I can call this setup a nesting dolls, maybe ben stevo, tamkras or somebody else can elaborate more about this.
2. Price has formed a tweezer tops indicating a strong pressure from above.
3. Price has found resistance in my Aqua trendline.
4. MACD showing bearsih divergence.

I'm not aiming a big pips by doing this CT, as I've been experiencing with lots of losses or probably just ended up with zero only. Most of the time price move back against my direction. So I'll be just happy if I can bank them with 20-30 pips. Remember CT trade has more risk than TC!

EDIT: Closed +23 pips
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  • #22,065
  • Mar 15, 2010 1:38am Mar 15, 2010 1:38am
Quoting wuming79
Wow, thanks man. That's very enlightening! :-) btw, the 4 Hour system MAs, are they workable in other pairs? I see that the MACD is not as good as EURUSD but sounds like if we just use MA to trade, we won't need the MACD?

Oh and Btw 2, I heard from Philip's record that he also trades equity. Does anyone knows if he uses the same set of indicators and MAs on his equity charts?
Yes, MA's work on all pairs and even on all timeframes. MACD can be adjust, but I don't know how. If you just started trading this strategy you will need MACD, because it takes years of practise before you start to feel the market.

I am not sure if Phillip uses the exact set of indicators and MA's, but he definetly uses the same principles.
  • #22,066
  • Mar 15, 2010 1:44am Mar 15, 2010 1:44am
Quoting hammerhead
My CT trade on AU this morning. I'm still trying not to take a CT trade but this one is hardly to resist!
The trade in itself was not bad. Price made double top under the resistance,MACD in divergence. But the R/R was bad, at least on my platform. The stop was about 40 pips, and the profit is 21 MA, which is only 20 pips. A good reason to stay out of the trade.
  • #22,067
  • Mar 15, 2010 2:16am Mar 15, 2010 2:16am
Hi

Could somene please help me with a quick question on TC patterns?

Would you take a TC above the .0045 line in an uptrend and below it in a downtrend ( provided there was some confrmation from the moving averages & market flow)?

Hope you can help

Mark
  • #22,068
  • Mar 15, 2010 5:57am Mar 15, 2010 5:57am
My trade went bad, -38 pips. It was my mistake. A good long would have been from the breakout level or when the high had been breached, not a TC on the 1hr. Live and learn I suppose.
Raymond
  • #22,069
  • Mar 15, 2010 10:54am Mar 15, 2010 10:54am
Hey folks...

Should have mentioned this sometime back there...

I've been on a sort of sabbatical from the 4hr method of late looking into formulating a scalping EA for the 5 and 1 minute charts. Tough, tough task. I'm not abandoning the 4hr method by any means I'm just looking into adding another tool to the mix. I think what really prompted this was the rhythm of the 4hr EURUSD since about mid Feb, difficult price action so I stayed away from it and started thinking more about this. The conundrum is that my thinking has pretty much turned 180 degrees for the lower timeframes...We've all been told to follow the longer term trend, but, and this is the killer, pullbacks and trend reversals always start on the lower timeframe. I'm not referring to picking tops and bottoms at all, that'll kill ya quick, but rather how to define, correctly define a pullback on the lower timeframe and return to the trend direction in the higher timeframe trend as long as that trend is in tact. The trend on a 5 minute time frame can only last a few bars for the way I am defining it so finding those quick (3 pip) entries on the 1min is what I'm referring to. Most EA's fail because of there is no human intervention. It's very easy to code an EA with a starting balance of $5000, run the backtest over two or three years and the EA never shows a loss with an ending balance of 3 million $ or something...The reson is because the stop loss is 5000 pips or something else that has some 99.99% hidden drawdown....

Anyway, to make an EA work there has to be some kind of human element that you have to see. No trading during, ater news, flat trends, spikes, etc...I'm an intermediate coder so my skills are limited. For those persons that have coded something that needs no human element and is say 75% correct with a normal R:R, you'll probably never see those posted. I know this has nothing to do with this thread but this is where I have 'been'. I might even start another thread when this task is done but it seems that every time a method is started the main logic gets pulled, twisted, or lost and I'm not sure if I want to go that route.

Either way, I'm still here...just hangin out in a parallel universe for now.....
  • #22,070
  • Mar 16, 2010 2:23am Mar 16, 2010 2:23am
Quoting mark r
Hi

Could somene please help me with a quick question on TC patterns?

Would you take a TC above the .0045 line in an uptrend and below it in a downtrend ( provided there was some confrmation from the moving averages & market flow)?

Hope you can help

Mark
It really depends on the situation. If the price is at support in an up trend, if the trend is strong, why not.

But, you are right, in many cases the TC above 45 level usually shows weakening of the trend, and TC maybe the last attempt of the price. Especially if there is a div. These signals often fail.

My favourite is BOZ, it fails very seldom. Because price has time to rest and accumulate before the new attempt.

So, it's up to you to trade them or not.
  • #22,071
  • Mar 16, 2010 2:39am Mar 16, 2010 2:39am
Hi Ira

thats relly helpful- thanks for your reply- guess its all about cross referencing it to the Moving Averages and overall look of the market

Looking at GU,EJ & EU at the moment- currently have no trades live, just watching & waiting!

Mark
  • #22,072
  • Mar 16, 2010 2:41am Mar 16, 2010 2:41am
Quoting Palmer
Hey folks...

Should have mentioned this sometime back there...

I've been on a sort of sabbatical from the 4hr method of late looking into formulating a scalping EA for the 5 and 1 minute charts.
The rhythm works everywhere. But, to trade 5min you have to be near the screen all the time. And it demands even more patience than 4h, to sit all day and not to miss the best trade.

For those who only start trading 5 min, don't forget, the lower timeframe the shorter stop loss and take profit should be.
  • #22,073
  • Mar 16, 2010 2:45am Mar 16, 2010 2:45am
Quoting mark r
Hi Ira

thats relly helpful- thanks for your reply- guess its all about cross referencing it to the Moving Averages and overall look of the market

Looking at GU,EJ & EU at the moment- currently have no trades live, just watching & waiting!

Mark
Absolutely right, the overall look of the market, I could't have said it better.

I shorted E/U, but the reasons are poor, so to b/e as soon as possible .
  • #22,074
  • Mar 16, 2010 6:57am Mar 16, 2010 6:57am
Quoting ira
The rhythm works everywhere. But, to trade 5min you have to be near the screen all the time. And it demands even more patience than 4h, to sit all day and not to miss the best trade.

For those who only start trading 5 min, don't forget, the lower timeframe the shorter stop loss and take profit should be.
I agree 100%...I have written some custom alerts that send me an email when a setup is occurring so I don't have to constantly monitor the charts. And, this would only be happening from about 6am to 1pm EST USA so that window is limited too. Then, I drop the EA on the chart and let it run to further limit chart time...getting there....
  • #22,075
  • Mar 17, 2010 11:07am Mar 17, 2010 11:07am
Hi
Nice to be back after some heavy work. Could not really trade during the day. Things have cooled down so I will be able to trade again. I took that tail on that the move down was a false move on a MACD round bottom.
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  • #22,076
  • Mar 17, 2010 1:26pm Mar 17, 2010 1:26pm
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 the tools. First, ask yourself: what do I...
This is the heart of the system explained in a few sentences. If you just do what is said here you will make pips because you will be in harmony of what the market is doing. We loose pips because we ran out of sync with the market and the currency. Then we trade against the tide.
One can see that Ira understand the sytem and the market rhythm. It takes hard work and dedication. Well done.
  • #22,077
  • Mar 17, 2010 1:59pm Mar 17, 2010 1:59pm
Quoting Phillip Nel
This is the heart of the system explained in a few sentences. If you just do what is said here you will make pips because you will be in harmony of what the market is doing.
Thank you, Phillip. It is so nice to have you back!
  • #22,078
  • Mar 17, 2010 2:39pm Mar 17, 2010 2:39pm
Thank you Phillip, you are the man.
But, why did you enter against the 89?
  • #22,079
  • Mar 17, 2010 3:47pm Mar 17, 2010 3:47pm
Hi Phillip,

Thanks for posting another example of how everything knits together.

I'm not sure whether I should be posting how I see things or not- I certainly wouldnt want anyone to rely on it because it is just an opinion but it would help me if someone could give me their thoughts on the "what if"

so here goes; this is how I see it.....

Price has moved up beyond the 89, and a little shy of the 200 where it has clearly paused for breath. It has also broken out of the channel that it has been trading in for most of March.

The last few hours show small bars where the market pauses before it makes its move.

That is reflected in the MACD which is showing a nice rounded top but still only a rounded top with 3 completed bars.

Being UK based, I will not trade overnight so by the time we hit the early morning activity there may have been some movement overnight.

I will wait.. until price hits an "area of interest"- either testing the 200 and moving beyond or bouncing off it, or back down to the 21/89 which at the moment are in much the same place. If there is a corresponding "trigger" on the MACD then I will jump in, if there isnt then..its down to waiting...

Any thoughts- even if its to say "you've got it all wrong!" would be very much appreciated

Kind regards

Mark
  • #22,080
  • Mar 17, 2010 9:06pm Mar 17, 2010 9:06pm
Quoting Phillip Nel
Hi
Nice to be back after some heavy work. Could not really trade during the day. Things have cooled down so I will be able to trade again. I took that tail on that the move down was a false move on a MACD round bottom.
Hi Philip,
Can I draw my channel as the picture below? I saw a MACD bearish divergence and price is around resistance area of previous high and also trendline. The long leg doji also saw a rejection of higher price at that point. I was very eager to short after the doji but MACD did not show red. Is this an example of the moment where we don;t need to wait for MACD?

Oh sorry, I realized we are talking about different pairs.

http://img34.imageshack.us/img34/7070/eurusde.gif
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