4 Hour Strategy (MACD)

second target almost reached but decide that was close enough so I just closed the trade for about 80 pips profits.

10:07 is the pair heading for the 89sma...looks like that, will see...

I was torn b/t the GBP and EUR on going short. I went the GBP at 1.5705 Both look to be heading WELL south. Good luck Tradmin. Your are right on the divergence

If trading was a lady, I would certainly say that "she's easy but expensive!" ;-)


yes diverg. and we should agree about the candles showing a "push down", the tails. -visibilty better on the 1hre chart.

nice to hear from you,

Remaining in the spirit of the Strategy

Market Rhythm

I have not really been trading for some time now. Was doing some overall reformations. As we know that every department of our lives seek for our maximum attention...by nature they are all tied together to proceed in one accord. There is need for SERENITY for maximum productivity in all that we do...

I Believe someone will find some use of this: Just an update of past even:
EURUSD-June 13th,2012/GMT+3

we are in a channel on the H4 time frame; and price is finding a good support on the bottom trendline with a bullish engulfing candle...

In the H1 frame, price is making a slanting Head and Shoulder (HsH) formation on the yellow moving average-200sma...

On the Daily frame, price was making double bottom with 2 tails/pin bars; this shows a strong support level for price, as such, price is due to pull back to the 21ema. I spotted this behaviour in the daily, and positioned myself to fill the space between the close of the 2nd tail and the 21ema, and price did just that by pulling back to the 21 ema.

Entry was made accordingly, with stoploss and exit settings. This can be clearly observed on the chart. The Insets on the Chart signifies various time frames where analysis was made, and how trade was entered and the overall results.

God Bless Phillip!

Gloria in Excelsis Deo!

I just looked at the Gbp and it looks like your trade is doing well, congrat!

Thanks for taking the time to offer me your views. Much appreciated.
As you mentioned, the TC was no more.

Oh how it pays to wait for the close of the candle.

Cheers

Sunny

I agree with you. In my mind I compare a candle to a stairtread in a stairways: if a stairtread is not in place, I fall. In a hurry, goal in mind, I could walk on a stairtread in place "almost nailed down", same with a 4hrs candle; seeing the job almost done. A stair builder has rules to apply in order to have a pleasant way using it.

On a 4hrs chart it takes 4hres to the "stair builder" to "close" the case on that candle. The work already done on a "4hrs candle not closed yet" can be evaluate on a 1hr chart.- that's my way of seeing when M. Nel wants the trader to take a look at the 1hre chart but keeping the final decision based on the 4hrs chart.
Have a pleasant way using it.

- again : thank you M. Nel, it is a great work that you do for us traders.

a tool to estimate time left to a "closed candle" I use is this one and it works on MT4. Maybe you have it already:

Remaining in the spirit of the Strategy
Market Rhythm

INSET A: Price had earlier rejected the monthly trendline (the thick purple trendline) with two tails and a triangle formed, and currently a nice inside bar formed, and the most current bar has opened pull back to the 21ema and tend to be moving upwards.

Also from the 4Hour MACD System rules, the Daily shows an end of its down run. That is, price had broken or closed above the 21ema, pulled back to it and is now moving away- a strong indication of end of the cycle(see the document and read the post that says: trading market cycles)

INSET B: This is the 4Hour time frame and the picture seems to be clearer here. We are in a ranging period and the 21 ema is beginning to hold price upwards; price got to the 200sma-the yellow moving average making a tail and pulled back to the 21, and currently price is moving away with a strong bullish candle and a TC on the MACD. Also note that the price has also assumed speed on the bottom trendline-strong support.

INSET C: Very righteous and beautiful setup. Emergine the nice double bottom of price on the 89sma, and the powerful bullish engulfing candle or railway track formation. This simply indicates the beginning of a new trend for the 1 HOUR time frame( Market Rhythm-the beginning of Rhythm). This appetising formation was aswell applauded by ZB (Zero bounce on the MACD). Powerful indication for a high probabiliity trade in the Long direction.

Stoploss and Exits are well stipulated in my chart.

INSERT D, E, and F shows the result or performace of my trade and analysis!

Comment: I have posted series of charts which shows that Confluence of events is the key to success in trading the Forex Market. This agree perfectly with what Mr Phillip has been teaching for years now. IF you can run down what price is doing from the higher time frame even up to the 1Minute, and you are able to get a certain space in the market where the whole Rhythm is in agreement or are in confluence, then the pips are yours; that is where the pips are enbeded. Enter the trades according to rules, and there you are! This is what the whole explanation above is saying. It simply shows that I was successful in the trades because I was able to spot a space in the market where both the Daily, the 4 HOUR and the 1 HOUR time frames are just saying the same thing. From my analysis above, you will simply discover that the whole time frames are saying YES to price in a Long or Bullish direction. So anyone who can sit down and believe he can do it and begins the journey, even with backtesting, spotting out how multiple time frame agree together in the direction of price, then you are that PROFESSIONAL trader that the whole world is looking for. You have become an Elite! The doors are opened through Mr Phillip Nel. He has released the keys! The pips have no option that to keep flowing into your account.

Comment: POSITION TRADING:
The bigger picture above is the 4 Hour time frame. That is just to show how I do my LONG TERM ANALYSIS (POSITION TRADING). Having established my plan through intensive trade analysis of almost the whole time frame; I then position myself for pips that will mature even in 3 to 5 days to come. So I execute 2 or 3 trades, take partial profits and allow the remaining position(s) to run to the full potential of the trade according to my analysis. If you check your chart, you will discover that price did continue beyone the upper trend line and heading to the 61.8 Fibonacci retracement level.

The little challenge that I had on board in my flight was THE NEWS on June 21st,2012...intensive reaction in the market. As we know that some currencies have correlations, that is, the movement of some pairs affect other pairs at certian period...so this affected the weather as I was flying to my proposed destination (61.8 Fibonacci level)-at a certain point the weather lost its smoothness, but I did not bother. The remaining of my position was already in breakeven and still very far away from the whole mess of the weather, hopefully, I will have a safe arrival.

Also, I always have my CRASH PLAN ready; if I anticipated a BAD WEATHER in the future or begin to see some changes in the WEATHER that seems harzadous, I will execute my CRASH PLAN immediately...I can decide to use my PARACHUTE (that is, using my automatic trailing stop EA to exit my trade) or call the closest station for EMERGENCY LANDING if I am actually the pilot of the aeroplane (that is, exiting my position manually). For more info on how to do this, see Phillips document of PERFECT LANDING-just scan through page 1 of this trade, the list of contents and download the pdf file and enjoy its content, it is well detailed in the document.
Please Note: In connection with INSET A; I said that price has broken or closed above the 21 after a long down run in the Daily time frame, and the rule says that when this happens, price normally pulls back to the 21 and tends to move away to the 89sma - The Trend Change Rule.

But it is important to note that the following may occur:

1. Price in its way to the 89sma, could be halted by any strong barrier which may exist before it gets to the 89, like a monthly trendling...and this should be considered for profit targets.

2. Also it can also happen that instead of smoothly moving to the 89sma, price could start ranging there; that is market CONSOLIDATION which may take some time or days before the actual breakout of price to its direction occurs. We adopt the Range Bound method of trading in this case and try to position ourselves for a breakout to any direction when it comes...

3. From my experience, I have also discovered that some times price can even get stucked between the 21 and 8 ema of the daily for days, and this is reflected in lower time frames (the 4 HOUR and 1 HOUR) as market CONSOLIDATION SCENARIO OR EMOTION BREEZES; WHAT I CALL, "PRICE IN THE FISH BELLY" I HAVE A UNIQUE WAY OF TRADING THIS SCENARIO: THE FISH BELLY STRATEGY!

Market Rhythm

EURUSD-JUNE 19 & 21/EURJPY-JUNE 19.2012

For EurUsd and EurJpy on June 19,2012; entry was made at the close of the 12:00 candle.

INSET A: For EurUsd on the 19th of June: Price has found support on the bottom trendline as well as on the 200sma on the 1HOUR time frame making a tail on the support level and moving away with a strong bullish candle-this signifies BUY PRESSURE. Entry was at the close of the bullish candle and stoploss just below the tail, or below the 200 or trendline. Exit is as shown on the chart.

INSET B: The EurJpy on the 19th of June:

Confluence of Event between the Daily and 1Hour and 4Hour time frames

The Rule states that when price moves away from the 21ema, it tends to pull back to it. This Rule is constant for all the time frames.
Now the Daily, 1Hour and 4Hour time frame agreed together to the fulfilment of our price movement rule:
The whole analysis of this trade was just according to one of the Rules as stated above.

I observed the Daily time frame, and saw that price had moved away from the Daily 21ema; right I remembered the Rule above; therefore I expected that at a certain stage it will occur that price will indeed retrace back to the 21ema (Daily Tf). I needed to switch to other time frames for further analysis. Also, I needed to carry along with me the Rhythm of the Daily time frame which I had already spotted. To do this, I drew a trendline to align with the Daily 21ema (the thick dark green trendline). So I switched to the the 1Hour to look for a situation or weather that will agree with what the Daily is about to do so that I can be in that flow with a nice small stoploss.

The Daily 21ema is reflected on the 1Hour chart by that thick dark green trendline which I had drawn on the Daily.

The light brown thick trendline following after the two moving averages in between is the 8ema of the Daily reflected on the 1Hour chart...The 3rd dark blue thin trendline on the 1Hour time frame as well was established from the 4Hour time frame- now price finds support strongly on this 3rd trendline with some tails, this signifies price rejection, that is, price has rejected that level as well as "BUY PRESSUE", meaning that at that level traders are not willing to go short anymore, they have rejected that price level or quote to further short the market, but are due for a long trade (traders are ready to head northwards with price). And heading northwards is just in agreement with our RULE; that price at a certain stage will definitely pull back or retrace to the 21 as anticipated in the Daily time frame.
So there is confluence of events on the 3 time frames; Daily, 4Hour and the 1Hour.

So at ease, I made my entry-early entry on the 1Hour, with a nice stoploss setting below the tail, and my take profit was at two level viz; the thick green trendline which is reflecting the Daily 21ema, and I used the Fibonacci retracement tool for other exit levels...

EURUSD-June 21,2012-15:00 candle/GMT+3)

Question: We trade towards support and resistance levels to take profits or position ourselves for a breakout; then why making entry at such level since the market can reverse against our position for a loss???

ANSWER TO QUESTION (SEE CHART FOR QUESTION-EURUSD-June 21,2012-15:00 candle/GMT+3)

When two powerful market weathers or scenarios or formation are in opposition to each other; lots of emotion or tension is breezed into the market. But in any case there are signs to read or know the one that has got more potential or pressure or force that the other. The direction of the major trend also has a major role to play. Such that the one in aggrement to the recent trend always tend to carry more weight than the other and dirves price in its direction. But when the major trend seems to have expired or is expiring (this is signified by the End-of-Run xtics setups), the trend is not really a factor to determine which way the price is to go.

A case study is the chart below (see chart)
Price is locked between two strong barriers. The reasons for entry towards the short direction as one may ask is due to the following:
Here the trend is not considered because is expiring, but the following factor necessitated my decision:

1. The thick red horizontal line conincides with our Historical price level (EURUSD-1.27024) which offers a strong resistance for price while the one providing support did not.

2. Up to 5 candles that broke through that level did not make there way upwards, but reversed back inside the zone-this signifies price rejection scenario-ie, price has rejected that level; this is also false breakouts indication

3. Multiple End-of-Run Characteristics: Our powerful End-of-Run Characteristics showed up in its several forms-double and triple tops of price, price has broken below the 21, pulled back to it or above it and is moving southwards-this happened up to twice with a TC on the MACD.

4. Market emotion: the final collapse of price with that tail towards the thick red horizontal line showing resistance(as indicated in with the circle) above which I set my stoploss. Also other small tails surrounding it indicated sell pressure in the market(a bearish bias/sentiment); this is then followed by a strong bearish candle with a tail-very powerful scenario or indication for the beginning of a bearish trend. Then at the close of that candle, I made my entry not minding that the candle closed just at the support level.

These four powerful reasons above agree together for a strong down move, and there was no other condition or situation opposing its strenght except that the bottom horizontal trendline is a support level; and that does not carry enough strenght to challenge the aggressively prevailing move of price southwards. As you can see, price did not even noticed its existence, but just went its way aggressively to the south.

God Bless Phillip!

Gloria Excelsis Deo!

Market Rhythm


EURUSD-JUNE 19 & 21/EURJPY-JUNE 19.2012


For EurUsd and EurJpy on June 19,2012; entry was made at the close of the 12:00 candle.
OVERALL CHART FOR THE ANALYSIS OR EXPLANATION POSTED ALREADY

amazing! I taught I joint the tool,but it is not there, so here again,

Thanks for this one.
I remember seeing it somewhere in this massive thread but having it given to me on a silver platter is much appreciated. Cheers.

Really like your stair builder analogy in terms of how to view an unfinished candle. We must be very wary where we tread if going to enter before the candle is closed.

Cheers

Sunny

thank you for your comments,

Hi Guys, first, thank you Phillip, for sharing your system and advice. I came across this forum about 2 weeks ago and the system intrigued me. I read over 60 pages of this forum to better understand the system. I felt it better matched my trading personality. I started trading and have done 11 trades, 7 profitable and 4 negative. But got my account up 20%. I am not a new trader, but relatively new to FX. I have been using Phil's system but with Heikin Ashi candles and a customized trend indicator, so I don't rely so much on the TAILS he uses. Other than that, pretty much follow his system and have used it on a number of currencies. Was wondering if others have also used it on other currencies besides the EUR and GBP and what success they have.

Thank you all, especially to Phillip !

Market Rhythm

GbpUsd Pair-25 to 26 June 2012/19:00 candle Close/GMT+3

The Rule says that the 89sma tends to halt or reverse price!

It was break time for price. That is, according to the rules, after either and up or a down run or cycle; price normally finds its way to the 89sma (half-time). It gets to the 89, and catch some rest before deciding to continue in its previous trend or begin a new one. Price can also begin to range at that stage (Price Consolidation)

So like earlier stated: the 89 either halt or reverse the price.

Analysis

4HOUR Time Frame: Price has kissed the 89 and is beginning to reverse with those two small tails-signifying BUY PRESSURE and a nice bullish candle supporting the move up...

1-HOUR Time Frame: I switched to the 1 Hour and it was a nice MACD Divergence scenario. This simply agrees with my analysis on the 4Hour time frame. CONFLUENCE CONFIRMED! And that is all every trader needs.
I took the deal yesterday, at the close of 19:00 candle (1 Hour early entry technique); with a nice stoploss and take profits.

1st exit = thick horizontal line
2nd exit = the 200sma at the 1 Hour, the yellow moving average
3rd exit = the 89sma at the 1 Hour, the blue moving average
4th exit = the thick blue trendline.
The next day; 26th June 2012, my positions were filled; quite interesting.

(SEE CHART FOR MORE DETAILS)

God Bless Phillip!

Gloria in Excelsis Deo!

Market Rhythm

EurJpy; June 26th,2012-10:00 candle-GMT+3

Reasons for taking trade:

A. Price has been in consolidation for weeks on the 4 Hour and within triangle; so breakout anticipated.

B. False breakout to the top and a nice breakout to the downside; Price broke the support line, pulled back to it and moving away making a trend continuation pattern on the MACD on both the 4 Hour and 1 Hour time frames

C. Price broke the 89 pulled back to it as well as the trendline and the 8ema and moving away with a nice bearish candle...

The whole scenario was very clear to me on the 1 Hour time frame where I executed the trade.

(SEE CHART)

God Bless Phillip

Gloria in Excelsis Deo!

Market Rhythm

EurUsd-June 26th,2012/ 20:00 candle close approx./GMT+3

Descision Time ???

Trade Analysis:

MACD Divergence forming at the bottom of a big Price Channel-a very powerful indication of price/trend reversal (See the Insets or small charts)

Confluence: MACD Divergence on both the 4 Hour and the 1 Hour time frame.

Price Movement Rule: In the 1-Hour time frame, price has broken above the 21 and 8, pulled back to below it and moving away(upward)

Market Emotion:Two tails and a strong bullish candle on the bottom of price channel(a powerful indication of buy pressure)(forming the Head) also a very strong support for price for a nice up move...

I took it on last night...

This morning look at what I saw... (SEE CHART)

The insets below shows clearly how trade was taken and the bigger picture which is the one hour chart is what is happening currently...

Already I have two open positions; my stoploss is not much...thinking whether to close one position and allow the 2nd half to run and see how the market will play out...The distance to the 2nd Shoulder is still far away, that is why I am considering closing out one of my positions?

...We have a very smooth weather this week (from my daily analysis)...very likely there will be lots of signals to trade.

God Bless Phillip!

Gloria in Excelsis Deo!

Market Rhythm

Update about 3 Hours Later

Stoploss Adjusted:

I adjusted the stoploss of one of my positions to below the tail, as seen on the 1hour time frame-the small circle on the big picture (see chart)...
My two postitions are still on.

Correlation:

The GbpUsd pair which in most cases is always in correlation with the EurUsd pair is aswell giving me reasons to allow my positions to play out. The pair(GbpUsd) tends to be finding support on the thick brown trend line( see chart in the Inset). Since the two pairs always agree most of the time, it is most likely that the move up is still highly valid...we all know that the market can be slow sometimes...

Market Rhythm

When a very good signal shows up in a wrong place or in a Bad weather; Please keep your Emergency Plan READY!

This was the case today for me, I was on board on the EurUsd pair since yesterday. Normally for such a high probability signal, within just and hour or two, price suppose to have moved reasonably in my anticipated direction (Long). But the not only that the movement was very slow, price was standing still for hours, about 3 hours...

Very important also is Inset A, the 4 HOUR chart. The Rhythm is very strong to the downside; Rhythm just began for the 4 HOUR chart: Price has broken all barriers downwards (the moving averages, and the thick blue horizontal line), pulled back to it or them and moving away with bearish candles and TC on the MACD...from my experience, when a strong Rhythm just began, any trade taken against its direction is a very sensitive one...so if I enter such trade I am always quick to take partial profits, and adjusting my stoploss accordingly...

All that and the reasons or points inserted in my chart was a very good confirmation for a bad weather. The signal was very attractive according to my analysis, but was not well situated...that is trading for all of us ***

Also like I said earlier in my previous posts about this trade; my stoploss was very small; two micro lots for each of the two executed positions. When I suspect a bad weather, one of my ways of protecting myself against the horrican breeze is by using a very small stop...it is part of my Emergency Plan (Crash Plan)...

(SEE CHART FOR MORE DETAILS)

God Bless Phillip!