4 Hour Strategy (MACD)

Trade: 21st January,2013

EUR/USD PAIR/January 21st,2013/GMT+2

From my anticipation as posted in the Forum last week, I was waiting for a strong move to the North, that is, Long trade. So I already know ahead of time what is very likely to happen, what to expect. So I simply wait for a certain price pattern to confirm it, then I pull the trigger!

That is exactly how I took the trade below. The long tail kissing the thick blue trend line (the 89 on the weekly) and moving away from it agrees with the rule which says that when price breaks above the 89 it tends to pull back to it and moves away in its previous direction. The long tail indicated a price rejection situation. Price has rejected that level, the 89sma and is warming up for an up move, then at the 1-HOUR time frame where I normally make my deal, I saw lots of tails, small tails saying the same thing. I was very careful with this trade because the move was as well against the 21ema of the 4-HOUR. The 4-HOUR 21ema is always a strong barrier for price, but I also know that the overall market weather has got enough strength or potential in the upside direction to blow or pierce through the 4-HOUR 21ema. So I balance my analysis with that and with a bold step of FAITH I took the deal!

Update: Wow! I lost money in this wonderful planned trade!
I was stopped out; my stop loss was hit and I missed the pips...the problem was not that I set a wrong stop loss but because of the rough weather, the weather was so grumpy. For a smooth weather, the stop loss is okay, and another reason is that, I don't sit down in front of my computer to watch my trade, it's like a waste of time for me unless I am doing some kind of back-testing on my chart to add a new idea to enhance my profitability in trading. If I were to be there life watching the market, I think I would have adjusted my stop loss to keep off from the noise of irregular price actions...

SEE MY OVERALL CHART BELOW FOR FURTHER DETAILS!
God Bless Phillip!

Hi naustingfx,

I don't understand really why you took a long..
Indeed you are right that the market and news is strong and want to heading north...BUT:
The rule is saying:
-if we are in a trend...price comes back to 21, then go north, comes back to 21 etc,etc
-if price breaks the 21, then it pulls back to the 21 and then wants to test the 89... then the ritme is completed and we are looking for a new trend/motion or ritme

The last is happening since 16 a 17 January.... So actually the rule is saying : we heading south to the 89 (you went against this rule...or is my view wrong?!)
Thereby I didn't saw a MACD signal for an long trade (maybe because you are in a different timezone?!)

yesterday we saw two TC(down) signals with a stop loss at say 1.34 and a take profit at the 89 (with that the R:R is +/- 1) I didn't took it because of the small candles already for 2 days. So that the market is reacting wildly today is the build up of emotion I guess?!
Also today we had two TC(downs) but now the R:R is below 1 again no go for me for a short till the 89. I still really think we going south to the 89, after that we probably break the 1.34... So actually I'm agree with you that we're going north....but first I think we must test the 89.....well we see!!

PS: I'm not criticism you....I just want to understand the system and want to learn!!

Hi Naustingfx and HappyMe,

I take delight to read what you both shared (not that it makes me happy you made losses). What decision you have made in your trade has their points. Allow me to mine.

I didn't think EURUSD would go long yesterday, looking at the chart. There was some important news and economic decision to be issued e.g.the Zew economic statement and BoJ meeting Japan's interest rates, so direction is unsure. I am careful about trading when there are new release on that day. I was around looking at the charts and noticed there is no signal for trade, it's like the pair doesn't know where it is going to head towards. Plus with the news, I am always careful.

Around Europe market open hour, many EUR pairs went downwards. I was quite furstrated at first as I thought I missed potential trade again. I went in to the trade at the next hour since I missed the first (0800hr eur), on my demo account I traded eurjpy and euraud and make 60+ pips on each. I went in an hour after 0800hr but on the basis that the 4hr and daily charts were pointing down. and in the 4hr chart (at 0800hr eur), the price candle has opened and move passed the 21ma. My target was around 89sma. Whenever I take trade like that i.e. when price moved swiftly towards my target price, I quickly take partial profit and reset stop loss to at least the entry price. Because it could mean volatility.

Now, what i have done might sounds crazy to some of you and might not have sounded correct. I expect feedback and welcome correction for any one in this forum. After all, were are here to learn from each other. So please do share you opinion as I am learning.

p/s Naustingfx, if I have understood correctly, you don't believe in news and that it could affect one's trading decision, but in my experience it does matter.

Thanks guys.

God bless

Hi Fuiyong,

About the technical vs fundamental Analysis listen to Lesson tree of Phillip. He's explaining there some things about it

See page 290, post 4338

Best regards

REPLY:
From the chart I posted and analysis you see it live that price did went long or north for about 50pips before two huge candles that went southwards...like you said, we are actually expecting price to go south on the 4Hour chart; and like you said there were some small candles for about two days...so the move to the south is being delayed; that should tell you something that price is finding a hard time doing that...and from my weekly analysis, it is the weekly 89 which I showed with a thick blue lines in charts that is hindering price, even till now it is still saying know to what the rule says in the 4Hour which you quoted in your reply...THE WEEKLY 89 HAS BEEN VERY POWERFUL HINDERING THE FULFILLMENT OF THE RULE IN THE 4HOUR TIME FRAME....SEE YOUR CHART NOW...AND WHAT IS IT SAYING...??MAY BE PRICE WILL HOPEFULLY OVERCOME IT...THERE IS A LOT OF UNCERTAINTY AS TO WHERE THE MARKET IS HEADING TO NOW...!

GENERAL COMMENT:

Yes! You are right about your analysis concerning the rules of price movement in this system (4-HOUR MACD SYSTEM). What you said is right, that is the anticipation for the 4-Hour chart at that stage. According to the rules, we are expecting price to proceed to the 89sma. But remember that it is an anticipation as regards where price should go; but it is not mandatory that it must happen; price could intend to do that like you said, but when the weather is not favorable that may not happen. You may have such a situation where you see a long term trend line or moving average before where the 89 is, so you have to also put that into consideration because a long term trend line or support or resistance level in many cases do hinder price from getting to the 89 and a price then reverse to continue a new trend...price action will indeed show you it tried to get to the 89 but due to circumstances or events beyond its control it has to do other wise. Sometimes it ranges close to the 89, but will not get there and it breakout in the reverse direction.


Concerning MACD signals; for some time now I have been trading on purely market rhythm or what some traders may call price action trading. I concentrate more on what price is doing than what the MACD is saying. As a result many of my signals I take them ahead of the MACD while the MACD confirms it later. Phillip Nel said it from the beginning of this trade that one must have first finish price action analysis and should be able to say –yes this is where the market is going before even looking at the MACD to confirm your analysis. If you trade just as he said you will discover that within a short time you will be trading successfully even without considering the MACD, you will be able to achieve this over time and price behavior will be flowing in your blood stream, and trading will be getting easier and easier to you every day. So it is not something I just started to do immediately, it have to take some time.


I also have decided to minimize or stop completely posting trades that seem to be complicated or complex even though the basics of the trades are strictly with respect to the MACD system. this is to avoid getting those who are joining for the first time confused against the simplicity of this excellent strategy or thread. Let’s keep it all simple!


NOW when I trade I use the same rule, the price action rule, but across other time frames above the 4-HOUR, like the Daily, Weekly and even the monthly. Phillip said it that; a nice 4HOUR move can be hindered by the moving averages of higher time frames when they are situated against the 4HOUR move. And that is why if you see the previous charts I have posted, you will discover that I use trend lines to show the moving averages of other higher time frame on both the 4HOUR and 1-HOUR . So when I am trading on the 4HOUR chart, my trend lines show me where those longer term moving averages are and I consider it when working out my risk reward ratio. And if I don’t have enough space to enter and make pips, I do not execute the deal no matter how nice it looks...SO the weekly time frame or chart contributed to my decision...YES IF THE WEATHER IS GOOD ENOUGH DEFINITELY WE ARE GOING TO THE 89 ON THE 4HOUR CHART, LIKE YOU SAID, SOUTHWARD FOR THE MEAN TIME AND FROM MY WEEKLY ANALYSIS WE WILL LATER ON IN THE LONG TERM HEAD TO THE NORTH. MY CONCLUSION ON THIS THAT YOU ARE RIGHT FROM THE PERSPECTIVE OF THE 4-HOUR ANALYSIS...maybe I did not put things clear enough.

Hi naustingfx,

Thank you very much for your comment and explenation! It's very clear!! I can work with that stuff

Trading From the Lens of Phillip Nel

IT IS A GAME OF PROBABILITY!

THE DICE IS CAST!!!

There are barriers all over the place in the market, but yet price keeps moving. This simply tells that at certain points the momentum or strength of price becomes greater than a given or prevailing barrier, and as such, price moves either to the north or south direction irrespective of whatsoever barrier that posed threat to its move. This is because price "herself" has got what it takes, the potential to pierce its way through. So any trader that can spot when price has gathered such strength to flow in any given direction will definitely begin to enjoy the pips we all are longing for here. If you can know this, what is left to become a professional trader will now be how to plan out your trades well-the risk reward ratio, position management, and maintaining a healthy risk capital profile, and you are on your way to the top...

Will get back to show how it all worked out for me!

Gloria in Excelsis Deo!


God Bless Phillip!

Planning my Trade and Result

I hope someone will find a good use of this...comments are welcome.

Cheers!

Hi Fuiyong, and how are you today?

I read your post and the contents well understood. I have also posted the reply to part of what you said in your post earlier. That is, concerning the movement of the Eur/Usd, the UP MOVE on the 22nd of January,2013. I did give my details on why I anticipated that up move and not down like you said. I tried to make it clear that it is all about the rule of this system. I just followed the rules. The 4-HOUR MACD SYSTEM IS THE ONLY SYSTEM I USE IN MY TRADING, I DO NOT APPLY ANY OTHER PRINCIPLE.

There are traders here who trade this system, but at certain points they apply some other principal they have read or obtained from some other trader or thread or other websites or forum which is quite different from what the 4-HOUR MACD SYSTEM is saying, and they still make pips with it. Which I don't think is bad. But it may only confuse some people who are joining newly if such traders do not make it clear that they imported some other principal that actually could be a good principle but quite different to what we do here. In such cases the newbies will be quite confused with regard to the principles behind their trading decisions as it did not agree to the rules of the system here....SO LETS TAKE NOTE OF THIS. That's by the way...

GENERAL COMMENT:

TRADING THE NEWS: I apologize to whom it may concern if what I said about NEWS TRADING is contradicting ideas here in this forum. To put it simple and brief: One of the major reasons I stopped considering the NEWS when I am trading is because of the issues I am having with my INTERNET SUBSCRIPTION, I do not use a BROAD BAND internet plan for my trading, I simply buy some megabytes, like 250MB which expires in a month, so because of that my internet speed when I am browsing is very slow. So sometimes it is frustrating to access the news calender here in Forex Factory, very frustrating. I will try and try and try and it does not come up as urgent as I need it...so I began to concentrate purely on my chart alone. I decided not to look into any NEWS CALENDER OR ECONOMIC INDICATOR UNTIL FURTHER NOTICE....I continued this way and over time I saw it in my track record that this is not even affecting my trading or results negatively, that encouraged me so much and I continued this way for about 2 years now like I said in my previous post. That is just it!

This does not mean I discourage anyone here from making reference to the News Calender as they trade. Please this is not what I mean. I am posting this information to correct any such impression if I have created such. Please let everyone take note.

Also this is to confirm how POWERFUL the 4-HOUR MACD SYSTEM is and works. A system that works excellently well and gives the target pips per month and beyond irrespective of what the ECONOMIC INDICATORS OR NEWS ARE SAYING. THIS IS VERY POWERFUL FOR ME, VERY POWERFUL!

Phillip Nel did say it, that; from his experience so far, he has discovered that when this SYSTEM (HIS SYSTEM) gives a signal close to NEWS time, that when the NEWS comes out, it most times follow or agree and goes well in the direction of the signal. That is to say that the NEWS confirms our signals. According to Phillip, most or many of the signals he had taken just before the NEWS release, turn out to be winning trades!
HE ALSO SAID THAT WHAT MOVES THE MARKET IS NOT THE NEWS, BUT PEOPLE, TRADERS; THE ACTIONS THEY TAKE WITH RESPECT TO THE INTERPRETATION OF WHATSOEVER NEWS THEY GET. AND AS A CHARTIST, THESE ACTIONS TAKEN BY TRADERS ARE CLEARLY SEEN IN THE BEHAVIOR OF PRICE (PRICE ACTION)... THERE ARE SOME SETUPS OR FORMATIONS AND MARKET EMOTIONS THAT SHOWS CLEARLY WHAT MAJORITY OR" LARGE VOLUME" OF TRADERS ARE ABOUT TO DO. SO IF YOU CAN SPOT THESE UNIQUE PATTERNS WHICH PHILLIP EXPOSED IN THIS THREAD, AND ABLE TO TAKE ADVANTAGE OF IT, THEN YOU ARE A NEWS TRADER! THIS IS HOW WE TRADE THE NEWS HERE!

ADDITION: Phillip said that if you have a trade running already, it is good to look at the news so as to know what is likely to happen so that one can position himself well ahead of time, as well as do the necessary adjustment to his trade like closing out some of your positions, stoploss adjustment, etc...that is the essence, THAT IS HOW NEWS AFFECTS US HERE! AND THIS WHAT THE SUMMARY OF WHAT PHILLIP SAID IN ONE OF HIS POST WHICH EXPLAINS ON HOW WE USE THE NEWS, THE TITLE OF THE POST OR MP3 BY PHILLIP IS " TECHNICAL VERSES FUNDAMENTAL ANALYSIS" WHICH IS LESSON 3, PAGE 290.
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Dear naustingFX,

I want to thank your for your reaction at 23 jan!! It makes everything so clear! at friday 25 jan I made a buy trade in the morning. Price was breaking the resistance at that moment and ended the day with 96 pips. Well not bad I guess

Next week I'm going to read all your post, good info and trades and hope to learn a lot again!!

All the best, best regards!!

Hi Naustingfx,

Thanks for your posting.

I have been using the 4mach method for more than a year now. I cannot seem to find the correct entry timing or is it mt stop loss setting? I am not sure. But take for example GBPUSD that I traded last week, I thought from the charts that the pair has potential for downside. So I traded the pairs several time but made big losses (on demo account). The price would reverse till my stop loss then goes towards the downside direction. This is so frustrating. And yes, I follow the 4MACD rule about entry. In fact many pairs has gone like this for me. I don't know where I have gone wrong. Do you think you can help me identify my problem and correct me?

Thanks.

About main trading hours 4MACD, time zone, I hope someone can help me.

How come you post statements only you may seem to be the one that understands what you are saying. Please can you add meaning to your post, so that one can be clear what you are talking about and be able to answer your questions...For me, you need to make your request clear okay.
Happy trading

Hey Bro;
Nice reading your words. Your post really encouraged me to continue the good work here. Thanks!
I try as much as I can to make everything simple here; the explanation, posts,etc. Because that is the basis of this system. It is straight to the point and easy to understand. This system works fine as well in all markets. When I discovered it, I settled with it...

I did not reply to your post immediately because my internet subscription has expired since last week after the posts I made. I tried to reply from my phone, my mobile phone, but network was so bad. I will be back by the grace of God next week. I am setting out a new plan for my trading, I have a journal I have developed for myself to track the pips I make here and to know the level of Financial Power I can establish for myself over some specified period of time...See you next week and peace be with your Soul! Cheers!

I come from China.My English is not good, Sorry!I would like to ask you about four hours MACD trading hours, such as Philips 16:00,21:00,1:00 (GMT +2), I have been looking at your post, thank you for sharing

Thanks for your posts!
There is no way you will be left behind in this thread okay? Everyone by grace try to carry one another along in this thread. So you will be getting answers to your areas of confusion from time to time...From your post, it seems you need a dedicated helper, someone who will be always there for you. Not to worry; in as much as every info you need to be through in this system has been posted by Phillip, I do know that some people find it difficult to rake through the whole pages and posts here...I will try to see how I can dedicate my little time and knowledge to you...

But before then; I want to say to you that this strategy gives us the time we should be in front of computer to trade. This trade is called 4 HOUR MACD FOREX TRADING STRATEGY. It simply means that we take our trades at the close of 4-Hour candle when proper analysis has been done and in agreement with the MACD it is confirms that we have a signal to trade...GBP/USD is really very profitable, but many a time is very volatile, I do not know how much experience you have got in trading as to combat the challenges of this pair...? If you are new to trading, I suggest you concentrate on the EUR/USD and as time goes on, as you begin to master the market and the uniqueness of price movement for different pairs, you can now begin to include such pairs GBP/USD, EUR/GBP, USD/CAD, etc who from my experience have found to be specially unique.

Another powerful way to get things right for yourself here is this: choose just ONE, I mean only one setup out of the whole lot of setups we trade here. Just choose one and work through it, when you become successful in making pips with it, you can add another one. Do you know that from track records here in this thread that you can make 200+ pips every month trading only TCs (trend continuation pattern)?...Just use your pick tool on your meta4 platform and put vertical lines on all the possible Tc trades from previous events or signals using a risk reward ration of 1:1. This is called solid back-testing keep scrolling your chart and continue for about 100 TC signals or more, then work out for yourself how many pips or wins and losses you would have made if you had traded those signals, and you will be amazed to see that you had doubled your account up to 2 to 3 times...then store your experience in your memory and do just that in a live demo account and then take it to you real live account with a small position size (2% or 3%) of your capital for each trade. If you are to make up to two or three deals, then you have to share the lot for the 2 or 3 positions such that all the deal added together will not be more that the percentage specified....and over time you will be well up on your feet...WHAT I HAVE JUST SHARED WITH YOU NOW IS AN MP3 PHILLIP SENT TO ME WHEN I BLEW MY TRADING ACCOUNT AND WAS HIGHLY TROUBLES AND SEEKING FOR A WAY OUT. SO DO NOT TAKE THIS INFO FOR GRANTED USE IT AND WE SHALL SEE TOGETHER WHAT IT BRINGS....Let me stop here for now till next week, and feel free to come up with any issue you are having and God will provide you with solutions here....the forum is highly loaded with traders of insight, knowledge and wisdom... You are welcome!

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RPELY:

16:00, 21:00, etc simply means that we take trades at 4 Hour intervals of time. Just concentrate on you own Local time or time of your broker and start counting from 00:00 (MID-NIGHT) adding 4 each time to your result. And you will know your own time to trade.

For example starting from 00:00. Let us now begin to add 4 Hours to this time.
We will have the following times:

 

1. 00:00 + 4 = 4:00
2. 4:00 + 4 = 8:00
3. 8:00 + 4 = 12:00
4. 12:00 + 4 = 16:00 = (4:00pm)
   
5. 16:00 + 4 = 20:00 = (8:00pm)
6. 20:00 + 4 = 24:00 hrs in a day (00:00 or 12:00 midnight)

This means that you are expected to be in front of your computer at the following times: 4:00am, 8:00am, 12:00 noon, 4:00pm, 8:00pm and 12:00 midnight for all time zones under GMT+1. This result is the same all over the world. The difference is only that due to world timing or our different locations, some people will be at their bed time while others are rising up to go to work. But these intervals of 4Hours does not change. SO use your local time or your broker time to count and you will achieve the same result as above. Simple!

Another little thing to resolve is when your local time does not agree with your broker time. In such case you have to use your broker time in doing the calculation as in above and then you check when it corresponds to your local time and you will be able to have it in your own local time as it agrees with your broker time resulting to trading at 4-4 hour candles close or interval.


If you scroll your chart you will discover that all the valid signals of this strategy definitely fell at these 4Hour time interval. If the first 4hour time does not give a trade or signal, the second one will, etc. Then we take trades at the close of any 4HOUR candle that gives us a signal.


I hope this makes it clear to you and any other one who may be in such need too!
Cheers! And God bless you!

Do you guys think that this strategy could keep working for the next 10 years in this market?
What is the best version of the MACD colored, and what is the best template for this strategy?

非常感谢你的指引，我会继续关注你。

Hi Amadeus8,
"this strategy could keep working"-I think so.
"best version of the MACD colored- : from page one, a lot of information are available, also a mater of choice.


I guess that with these, you could set template and indicators. I use 102 decimal (that's for the macd) and adjust levels to 150-300-etc since I have a 5 digits. But if you have 4 digits, just leave the level setting just as they are.(15-30, etc)
I use ATR, for aproximation of Stop Loss,- ADX for strenght of market.
Divergence, macd formation, candles expressions are part of it.
I suggess starting with a demo, look for TC (trend continous), get familiar, then later look for RT, RB, etc.- keep looking for possible formation being «under construction».
this strategy has rules, by being familiar with them, the direction of the market can be anticipated. And by anticipation, you can trade with more confidence.
"mine.tpl" is my set up, it is a template, all attachments are for MT4.
let me know if something is not quite clear for you,
have a nice day,