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4 Hour Strategy (MACD)

  • #22,681
  • May 13, 2010 8:29pm May 13, 2010 8:29pm
Quoting xeneric
It helps to post a chart so that others can see what you are seeing. That way, other traders can give you feedback and newbies can learn from you. Just go to FILE then SAVE AS PICTURE on MT4. Once you have saved your image, then go to MANAGE ATTACHMENTS when you are posting on FF to upload your chart. Looking forwards to seeing your charts here.
yea i totally agree with that too! i mean it's ok if u dun post live la... but at least post it after e trade. then pl can help u analyse and comment..

anw silver, sorry if i m wrong but are u using a fixed dollar per pip? cos u mentioned the amount of pips u lost. shouldn't u be fixing the risk per trade which depends on the stop loss size instead?
  • #22,682
  • May 13, 2010 8:38pm May 13, 2010 8:38pm
Quoting Morelands
I'm in a trade currently on the GBP/USD. The 1st chart shows the TC on the 4hr. I did not enter for 2 reason: 1) The candle closed right on the support area and 2) the SL was too big. So I went to the 1hr to see if there would be a pull back or would break the support area. Well, the later of the 2 happen. I enter a little early on the 5 min
Thank for you post, may you give us your SL and TP in this trade?
I'm in this pair trading and my tp is 1.4525.
Thank you very much, good luck to you.
  • #22,683
  • May 13, 2010 8:52pm May 13, 2010 8:52pm
Quoting davidwu61
Hi Palmer,

Can you help define "break through the resistence/support line", sometimes price just forms congestion zone near these area and may go up/down on these support/resistence; How does you senior trader tell the support/resistence has been broken or not ?
Sure:

When the 4hr is trending well, you pretty much already have a directional bias for that pair, in terms of the EURUSD right now it's nothing but short. So, the first step is there, "I only want to be short this market." on the 4hr chart. I will take an opposite direction per the 4hr direction on a lower tiimeframe like the 15/5/1 if I have the time to monitor that, but these are not held very long. If I see a gap in the 8ema or the 4hr is hitting major support than that's where I would look for a quick opposite direction trade...but that's another story entirely.

Back to the S/R...OK, we want to be short. The EU has been heading down since the beginning of November on the daily chart where I have my Fib#'s drawn...chart 1.

Now to the 4hr. Note the light blue line that is showing support anf the thing white line under it, that's the 23.6 Fib# from the daily chart.
#1 is the first hit on this line, #2 the second, which tells me this is valid support. Now look at #3 with the highlighted box. Price closes below the support line but hits the 23.6 Fib # and does not make it through to the downside. When I see a support line this close to a Fib# I consider this entire 'area' as support.

Now #4, hmm. we broke through both the support and the Fib# to the downside and price did not go down..what's up with that? Always check the economic calendar..here the Fed Funds rate was released...one of the most volatile days in currency trading...anything goes so you can throw out every rule and trading method because nothing applies here. I simply do not trade on that day. Those price bars are about 120 pips in range...yikes.

Now #5. Price has broken below the support line, then the Fib line, then the support where the fed funds # was released and the MACD was coming back down below the zero line. All these 'lined up' to the downside with a short bias already built in. If you see the red x, that would have been the bar I would have tried to get in on.

There is a lot to determining when a support line or resistance line is broken. I don't number all charts like this because I can see this when I draw the support or resistance lines along with the Fib#'s...and check the calendar.

The last chart is the 1hr. This is a different subject...getting in early...and the lower timeframe entreis should only be studied when you have a thorough grasp of the 4hr method. Take a look how the MACD was reacting during the 3 ,4 and 5 areas. After the support bounce they were heading up and so was price. #5 on the 1hr after the support breaks and the MACD is heading south again with price.

There are and will be whipsaws during breaks of support. It's critical to take in all factors as to what creates the support, news events, and non-news events (#5) where price found its way down again. The MACD trend helps as well. I wish it could be as simple as entering as soon as price close below this line or that one but we all know that is not the case.

Again, if I happen to be watching the 5 or 1min timeframe and I see the 4hr trendline on a 5min chart, that 4hr trendline support area is valid for 10,15, 20 pips or so, The longer the timeframe the more 'area' you need to give those s/r areas. That 10, 15, 20 pip area on a 5 min chart can be the entire trade for the day on that 5mni chart. Some of those lower timeframe entries do run with the 4hr support breaks. That is where you can get in very very early into that 4hr trend. But again, you have to know the 4hr like you know how to ride a bike...
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: eu1hr.gif Size: 35 KB
  • #22,684
  • May 13, 2010 10:01pm May 13, 2010 10:01pm
Quoting qphu
Thank for you post, may you give us your SL and TP in this trade?
I'm in this pair trading and my tp is 1.4525.
Thank you very much, good luck to you.
Not ignoring you. I just have been studying charts and was about to go to bed. I get to it this week-end
Raymond
  • #22,685
  • May 13, 2010 10:21pm May 13, 2010 10:21pm
Quoting Palmer
Sure:

When the 4hr is trending well, you pretty much already have a directional bias for that pair, in terms of the EURUSD right now it's nothing but short. So, the first step is there, "I only want to be short this market." on the 4hr chart. I will take an opposite direction per the 4hr direction on a lower tiimeframe like the 15/5/1 if I have the time to monitor that, but these are not held very long. If I see a gap in the 8ema or the 4hr is hitting major support than that's where I would look for a quick opposite direction trade...but that's...
Thanks a lot Palmer.

These are valuable information.

Sorry for taking so much of your time though.

David Wu
  • #22,686
  • May 13, 2010 10:43pm May 13, 2010 10:43pm
Quoting xeneric
It helps to post a chart so that others can see what you are seeing. That way, other traders can give you feedback and newbies can learn from you. Just go to FILE then SAVE AS PICTURE on MT4. Once you have saved your image, then go to MANAGE ATTACHMENTS when you are posting on FF to upload your chart. Looking forwards to seeing your charts here.
Hi Xeneric,

Message noted. Will try to post chart so that we can learn from each other. Cheers...
  • #22,687
  • May 13, 2010 10:48pm May 13, 2010 10:48pm
Quoting yuan83
yea i totally agree with that too! i mean it's ok if u dun post live la... but at least post it after e trade. then pl can help u analyse and comment..

anw silver, sorry if i m wrong but are u using a fixed dollar per pip? cos u mentioned the amount of pips u lost. shouldn't u be fixing the risk per trade which depends on the stop loss size instead?
Hi Yuan,

I am using MT4 with mini account. Frankly, in terms of money, I didn't lost so much but it hurt my confidence level seeing 600 pips got wipe out. I think one of the reasons why I lost much is exactly what Xeneric said, the market is too volatile and I have to place a bigger sl in order to stay in the trade. However, my analysis was wrong and that is part of the reason why I lost so much pips. I guess I have long way to go before I can become a better trader.

  • #22,688
  • May 14, 2010 12:50am May 14, 2010 12:50am
Quoting silverfox88
Hi Yuan,

I am using MT4 with mini account. Frankly, in terms of money, I didn't lost so much but it hurt my confidence level seeing 600 pips got wipe out. I think one of the reasons why I lost much is exactly what Xeneric said, the market is too volatile and I have to place a bigger sl in order to stay in the trade. However, my analysis was wrong and that is part of the reason why I lost so much pips. I guess I have long way to go before I can become a better trader....
guess it's better to know wad's wrong than care abt e money esp since now ur account not big. yea guess a bigger SL will help, but i will think that a bigger SL means a lousier R:R? guess it depends on how u place ur trades.
  • #22,689
  • May 14, 2010 1:02am May 14, 2010 1:02am
Quoting xeneric
Congratulations Ashes and Morelands on your well executed trades.
thank you. I'm trying to ride it. also thank you for the voucher.
  • #22,690
  • May 14, 2010 2:44am May 14, 2010 2:44am
Quoting ashes
thank you. I'm trying to ride it. also thank you for the voucher.
Can you tell me how to ride a trend? I closed GU at 1.46, but it tends to fall more.

Thanks
  • #22,691
  • May 14, 2010 3:10am May 14, 2010 3:10am
Quoting March2011
Can you tell me how to ride a trend? I closed GU at 1.46, but it tends to fall more.

Thanks
if you think a trade has potential to continue trending you could either trail your sl to resistance/support levels as to secure some profits or you take partial profits around those levels or both, securing profits and taking partial profits.
  • #22,692
  • May 14, 2010 6:29am May 14, 2010 6:29am
Quoting ashes
if you think a trade has potential to continue trending you could either trail your sl to resistance/support levels as to secure some profits or you take partial profits around those levels or both, securing profits and taking partial profits.
I think I'm almost done with entry, however exit is the hardest part. I know I should ride the trend but always become a little nervous when the price action stalls or retraces.
  • #22,693
  • May 14, 2010 6:56am May 14, 2010 6:56am
Quoting davidwu61
Thanks a lot Palmer.

These are valuable information.

Sorry for taking so much of your time though.

David Wu

No worries...we're all here to learn.

EURUSD heading to 1.9000....at least?

Monthly: if support is broken...This being a monthly chart you can expect a pullback on the 4hr chart that can be a few hundred pips. Longer term chart pullbacks might look like trend reversals on the shorter timeframes.
Attached Image
  • #22,694
  • May 14, 2010 6:56am May 14, 2010 6:56am
Took a short on EJ at 115.93 with sl at 116.27 (candle open price) and tp at 115.00 (near previous low candle besides the insane bear candle).

That was my plan but keyed the tp wrongly at 114.00. However, managed to see the price retrace and set sl at 115.23 which was hit. +70 pips. Took the trade as the previous candle was a shooting star and retraced from near 21MA. R:R ratio was also more than 1. 23 pips left on the table due to my mistake of entering the tp. Have to take note to double check my trade after placing it.

Will consider entering short again if price breaks 115 once more.
  • #22,695
  • May 14, 2010 7:34am May 14, 2010 7:34am
Here's a nice one:

Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp100514h4.gif Size: 23 KB


I particularly like this reversal because it's Friday and there was likely to be some profit taking anyway.

Secondly it's off 0.8600 which is a key support/resistance point.

Thirdly it's off a pin bar.

Fourthly it's with the main trend.

The downside is there may be some support at 0.8545 so there may be a bounce
Gone to a better place
  • #22,696
  • May 14, 2010 9:23am May 14, 2010 9:23am
Quoting March2011
I think I'm almost done with entry, however exit is the hardest part. I know I should ride the trend but always become a little nervous when the price action stalls or retraces.
Have a look back through the charts and look at the average time it took for a typical trade to reach its logical conclusion. It's often longer than you think.

Are you over leveraged? If you worry about your drawdown it's likely you are risking too much. Worry will destroy your trading and make you take hopeless decisions.

Are you sticking to the same time frame? Retracements are magnified on lower time frames. If you have done your homework you will accept retracements and even add to your trade when it starts to move in your direction again.

Think: Would I buy here? (for a short trade); Would I sell here (for a long trade) If the answer is I'm not sure, then you could maybe close. If the answer is definitely no, then let it ride.

I hope this helps. I have had the same problem.
Gone to a better place
  • #22,697
  • May 14, 2010 9:57am May 14, 2010 9:57am
Quoting yuan83
guess it's better to know wad's wrong than care abt e money esp since now ur account not big. yea guess a bigger SL will help, but i will think that a bigger SL means a lousier R:R? guess it depends on how u place ur trades.
Ya, agree with you and I am reviewing my wrong trade. I am really thankful that the people in this forum is so friendly and helpful. Glad to have found this forum.
  • #22,698
  • May 14, 2010 10:12am May 14, 2010 10:12am
Quoting Palmer
No worries...we're all here to learn.

EURUSD heading to 1.9000....at least?

Monthly: if support is broken...This being a monthly chart you can expect a pullback on the 4hr chart that can be a few hundred pips. Longer term chart pullbacks might look like trend reversals on the shorter timeframes.
Hi Palmer,

EURUSD is on a free fall. Congrat to you if you have shorted and still holding
  • #22,699
  • May 14, 2010 11:36am May 14, 2010 11:36am
Quoting smikester
Have a look back through the charts and look at the average time it took for a typical trade to reach its logical conclusion. It's often longer than you think.

Are you over leveraged? If you worry about your drawdown it's likely you are risking too much. Worry will destroy your trading and make you take hopeless decisions.

Are you sticking to the same time frame? Retracements are magnified on lower time frames. If you have done your homework you will accept retracements and even add to your trade when it starts to move in your direction again.

Think:...

Thanks a lot Smikester, you made my mind clearer.

I like your avatar, so funny , just do the same as the skier, ride until smt stops us
  • #22,700
  • May 14, 2010 7:17pm May 14, 2010 7:17pm
Oh man...do you guys think EURUSD will be gone? If it is gone, can the system still works well in other pairs? I was just getting used to the rhythm in EURUSD....
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