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  • #141
  • Dec 8, 2010 3:50pm Dec 8, 2010 3:50pm
hi sburton

iam nom not sure if my MACD settings are correct. iam not getting the same macd as shown in your first post. i only get thin red and green lines with large black gaps in between each line. looks nothing like your charts.
  • #142
  • Dec 8, 2010 4:11pm Dec 8, 2010 4:11pm
Quoting whatfx
hi sburton

iam nom not sure if my MACD settings are correct. iam not getting the same macd as shown in your first post. i only get thin red and green lines with large black gaps in between each line. looks nothing like your charts.
The reason is because the MACD I use is a custom MACD indicator created for Philip Nel's 4 Hour Strategy. It is the same as a standard MACD set at 5-fast/13-slow/1-MACDSMA with two exceptions: 1) it does not draw the MACD SMA line and 2) it colors the current MACD bar green when it is greater than the previous bar and red when it is less than the previous bar.

So, if you want to use a standard MACD just set the settings to 5/13/1. When the current bar is less than the previous it is signaling a short trend and when the current bar is greater than the previous it is signaling a long trend.

See the image below.
Attached Image (click to enlarge)
Click to Enlarge Name: audusd 12.8.2010.gif Size: 18 KB
  • #143
  • Dec 8, 2010 4:40pm Dec 8, 2010 4:40pm
some questions:

for a long entry, you enter when the price retraces to the 21 sma and then on the close of the first 4hour candle when the macd first turns green.

what if it takes a long time for the macd bar to turn green, say 8-10 hours. how long do we wait ? is there a time limit ?

also, the price needs to close higher than the 21 sma. how many pips higher ? what if the first 4 hour candle doesn't close above the 21 sma, but the 3rd or 4th does ? is that still a valid entry on the 3rd or 4th candle ? how many candles can we wait on ?

am i correct in saying that the usdjpy long trade triggered on 15 nov would have been entered on the second retrace was closed out at a loss when price went down and touched the 89 sma ?


regards
  • #144
  • Dec 8, 2010 5:49pm Dec 8, 2010 5:49pm
Quoting whatfx
some questions:

for a long entry, you enter when the price retraces to the 21 sma and then on the close of the first 4hour candle when the macd first turns green.

what if it takes a long time for the macd bar to turn green, say 8-10 hours. how long do we wait ? is there a time limit ?
No time limit.

Quoting whatfx
also, the price needs to close higher than the 21 sma. how many pips higher ? what if the first 4 hour candle doesn't close above the 21 sma, but the 3rd or 4th does ? is that still a valid entry on the 3rd or 4th candle ? how many candles can we wait on ?
A VERY good question. I have actually been waiting for someone to ask this. I am not sure what the best way to handle these situations. Obviously the ideal scenario is for the 1st candle when MACD turns back in the direction of the trend to close on the trend side of the 21. In my backtest trades I would enter once priced closed on the trend side of the 21 so long as that occurred within 3 candles of a trend continuation signal from MACD. If that did not happen within 3 closed candles than I would wait for another trend/retrace/trend continuation pattern to occur before entering.

I have never been entirely comfortable with this 3 candle rule because the trades usually lost if price did not close on the trend side of the 21 on the initial trend continuation candle. What I found is that when the 21 does not hold it usually means either a weak trend or a range has formed. However, there are also situations where the 21 doesn't hold at first, but the move does eventually gain strength and go on to take profit. I would hate to be left out of a winning move.

So what are your thoughts? Should we wait for a new trend/retrace/trend continuation pattern if price does not close on the trend side of the 21 on the 1st trend continuation signal candle? Should the number be 2 candles? 3? Unlimited?

Is everyone confused? If so, I can make a video explaining what I am asking and we can debate this.

Quoting whatfx
am i correct in saying that the usdjpy long trade triggered on 15 nov would have been entered on the second retrace was closed out at a loss when price went down and touched the 89 sma ?


regards
The USDJPY long entry was triggered on Nov 12th after price retraced and touched the 21 and then MACD signaled a continuation of the long trend. It was the 1st retracement to the 21. The entry price should have been 82.36 (I got in a couple hours late at 82.48). My TP was 84.77 with a SL of 80.20 (had I got in on time the TP would have been 84.52). Price reached a high of 84.395 on 11/29 before losing steam. The 21 crossed the 89 on Friday afternoon, 12/3 signaling an exit, however I did not get out until Monday, 12/6. My exit price was 82.89 which netted me a small win (15% of potential).
  • #145
  • Dec 8, 2010 8:11pm Dec 8, 2010 8:11pm
AUDUSD long triggered

GBPJPY, GBPUSD cross is happening now...
  • #146
  • Dec 8, 2010 8:39pm Dec 8, 2010 8:39pm
Hi roundrock,

I was just thinking that A/U long trigger you are talking about might be a false signal as the retracement penetrated through the 21 EMA then also penetrated through the 89 SMA, before continuing with the trend.

I guess it's still a valid entry, but maybe more risky.

(Please don't think I'm putting you down, I don't want to come across as doing so. Just trying to make some constructive criticism.)


sburtonhome (can I call you SBH?),
What would you do in this situation?

Cheers guys,
TG
  • #147
  • Dec 8, 2010 9:06pm Dec 8, 2010 9:06pm
I don't see it as a valid trade per the rules. We had a cross of the ma's and then price has pulled back to the 21ema and continued straight down through the 21ema. Price still hasn't closed back above the 21ema (with MACD) for a vailid long.

todd

Quoting roundrock
AUDUSD long triggered

GBPJPY, GBPUSD cross is happening now...
  • #148
  • Dec 8, 2010 9:14pm Dec 8, 2010 9:14pm
in my chart its a clear long entry as per rules

SBH, Can you clarify how many candles we wait between price retracing past 21 EMA and our entry. in this case 6 candles. also retracing deep into 89EMA is a bad thing ? it did close below 89.

in my view, its a valid entry.

some cases like USDCAD (already mentioned by SBH), where took more than 12 candles between 21 ema retrace and entry, we could get into troubles.

ideally things should happen quickly. but not always it happens like that
Attached Image (click to enlarge)
Click to Enlarge Name: au.gif Size: 23 KB
  • #149
  • Dec 8, 2010 9:48pm Dec 8, 2010 9:48pm
Quoting the-game

sburtonhome (can I call you SBH?),
What would you do in this situation?

TG
I just entered the AUDUSD (albeit a higher risk entry for sure). This is a situation similar to what I talked about earlier where there are several candles after the trend continuation signal until price closed above the 21. I take these types of entries much more cautiously but let me show you why I entered.

Below is a D1 chart of the AUDUSD. The long-term trend is definitely long. Price is bouncing off the Daily chart 21EMA and the 50 Fib retracement level was clearly rejected. It looks like the pair wants to re-test its all time high of 1.0180 and the fundamentals are in our favor. I did make sure to set a TP/SL target that puts my TP just below the all time high just in case that level isn't broken.

Happy trading!
Attached Image (click to enlarge)
Click to Enlarge Name: audusd 12.8.2010 d1.gif Size: 21 KB
  • #150
  • Dec 8, 2010 9:52pm Dec 8, 2010 9:52pm
Quoting roundrock
in my chart its a clear long entry as per rules

SBH, Can you clarify how many candles we wait between price retracing past 21 EMA and our entry. in this case 6 candles. also retracing deep into 89EMA is a bad thing ? it did close below 89.

in my view, its a valid entry.

some cases like USDCAD (already mentioned by SBH), where took more than 12 candles between 21 ema retrace and entry, we could get into troubles.

ideally things should happen quickly. but not always it happens like that
These types of entries are definitely ones that require much more analysis. The risk is higher but I agree that this is a valid entry.
  • #151
  • Dec 8, 2010 9:54pm Dec 8, 2010 9:54pm
Quoting roundrock
AUDUSD long triggered

GBPJPY, GBPUSD cross is happening now...
Also USDJPY is on-alert Long.

I expect to close my GBPJPY within the next 8-12 hours.

We may see GBPUSD, GBPJPY, and USDJPY entries within the next 16-48 hours.
  • #152
  • Dec 8, 2010 9:54pm Dec 8, 2010 9:54pm
Results obviously will vary from one broker to another. My Aud/Usd 4hr candle hasn't closed yet. But I see a couple of you have already entered the trade per your own valid trade.
  • #153
  • Dec 8, 2010 9:55pm Dec 8, 2010 9:55pm
Aud/Usd is a trade because price has closed above 21 ema. It had already touched the ema, but was just waiting for it to close & be above 21ema which it has done already. Usd/Cad i will trade in demo if it closes below 21 ema just to see how the trade works out. On Aud/Usd i have a SL at 0.9535 which is about 330 pips! Is this what everybody has for SL on this trade?
  • #154
  • Dec 8, 2010 9:59pm Dec 8, 2010 9:59pm
Quoting ferndog
Aud/Usd is a trade because price has closed above 21 ema. It had already touched the ema, but was just waiting for it to close & be above 21ema which it has done already. Usd/Cad i will trade in demo if it closes below 21 ema just to see how the trade works out. On Aud/Usd i have a SL at 0.9535 which is about 330 pips! Is this what everybody has for SL on this trade?
I tightened my SL to 300 pips (.9565) to put my TP under the all-time high of 1.0181.

FYI. In my two year backtest of the AUDUSD, the average move was 329 pips.
  • #155
  • Dec 8, 2010 10:04pm Dec 8, 2010 10:04pm
Quoting sburtonhome
I just entered the AUDUSD (albeit a higher risk entry for sure). This is a situation similar to what I talked about earlier where there are several candles after the trend continuation signal until price closed above the 21. I take these types of entries much more cautiously but let me show you why I entered.

Below is a D1 chart of the AUDUSD. The long-term trend is definitely long. Price is bouncing off the Daily chart 21EMA and the 50 Fib retracement level was clearly rejected. It looks like the pair wants to re-test its all time high of 1.0180...
Nice Thank you for your detailed analysis
  • #156
  • Dec 8, 2010 10:23pm Dec 8, 2010 10:23pm
Quoting ferndog
Aud/Usd is a trade because price has closed above 21 ema. It had already touched the ema, but was just waiting for it to close & be above 21ema which it has done already. Usd/Cad i will trade in demo if it closes below 21 ema just to see how the trade works out. On Aud/Usd i have a SL at 0.9535 which is about 330 pips! Is this what everybody has for SL on this trade?
I entered that trade as well on a demo account (first trade with the system). I have a zig-zag indicator set at 8,5,1 and therefore I set my SL at .9724, or 135 pips.

Not sure if that's the best plan. Thoughts?
  • #157
  • Dec 8, 2010 10:36pm Dec 8, 2010 10:36pm
Quoting sburtonhome
I tightened my SL to 300 pips (.9565) to put my TP under the all-time high of 1.0181.

FYI. In my two year backtest of the AUDUSD, the average move was 329 pips.
Good to know...hard part will be sticking to the plan...i know there will be some losers & thats when our patience or at least mine will be tested. So hopefully the winners will outgain the losers.
  • #158
  • Dec 9, 2010 3:31am Dec 9, 2010 3:31am
Hi sburtonhome,

thx for sharing your system in such detail. nice and simple just the way i like them. i do however have a question about the entry after a direction signal is given.

Im looking at the AUD/USD 4hr long confirmation entry that was given 3 bars ago. you said that we wait for macd to go from red to green with price closing above the 21ema, however the macd when from red-green BELOW the macd 0 line. just want to confirm if it matters whether the macd should be above/below its 0 line when taking the entries..

thx in advanced
  • #159
  • Dec 9, 2010 6:53am Dec 9, 2010 6:53am
Quoting T2Twell
Hi sburtonhome,

thx for sharing your system in such detail. nice and simple just the way i like them. i do however have a question about the entry after a direction signal is given.

Im looking at the AUD/USD 4hr long confirmation entry that was given 3 bars ago. you said that we wait for macd to go from red to green with price closing above the 21ema, however the macd when from red-green BELOW the macd 0 line. just want to confirm if it matters whether the macd should be above/below its 0 line when taking the entries..

thx in advanced
No, it doesn't make any difference whether MACD is above or below the zero line. Great to have you trading with us!
  • #160
  • Dec 9, 2010 6:58am Dec 9, 2010 6:58am
Quoting ferndog
Good to know...hard part will be sticking to the plan...i know there will be some losers & thats when our patience or at least mine will be tested. So hopefully the winners will outgain the losers.
Yeah, the trade-off of not having to dedicate much time to the charts with this system is that you lose almost half of your trades. For some that is more than their trading emotions can handle. Personally I don't mind losing trades so long as my account every year is growing.

This is definitely a long-term system. In my backtest results over the last 5 years there have not only been losing months but losing quarters. There were periods where it took six months to get out of draw-down. For those who need instant gratification (and I'm not saying that is bad), this system is not for them. For those who don't have a ton of time to dedicate to trading/charts this may be the answer.
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