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4 Hour Strategy (MACD)

  • #25,981
  • Jul 16, 2013 3:01am Jul 16, 2013 3:01am
Quoting edge-t
Hi, Got a few questions here. Been learning about the 4hr MACD for the last 1 week. Not too sure if I made the right decision in shorting AUDUSD yesterday. I used the H4 chart. 8MA was below 21MA, 21 below 89MA---that indicates a strong bearish market rhythm right? Going to the dailys, the trend still appears to be bearish. So, I saw a TC forming on the AUDUSD, candles bouncing off the 21MA. I went to the H1 and made my short entry from there. However, the price went north and took out my SL after another 10-12hrs. I understand that there isn't...
Hi edge-t, first of all welcome here!!

Here is my view:
-price below 89 => bearish mood
-MACD gives a signal (Sell)
-price came back to 21 and bounced south (at time of entry 35pips below 8ema)
-Rule: if price away from 8, price tends to go back to 8

SL = last swing high = 75 pips
TP = SL....but in this case I would say....next pricelevel is +/- 55 pips

R:R is bad.... I would say: No Deal
You can manage risk, but you can't manage the return
  • #25,982
  • Jul 16, 2013 3:16am Jul 16, 2013 3:16am
Quoting HappyMe
{quote} Hi edge-t, first of all welcome here!! Here is my view: -price below 89 => bearish mood -MACD gives a signal (Sell) -price came back to 21 and bounced south (at time of entry 35pips below 8ema) -Rule: if price away from 8, price tends to go back to 8 SL = last swing high = 75 pips TP = SL....but in this case I would say....next pricelevel is +/- 55 pips R:R is bad.... I would say: No Deal
Cool, thanks for the prompt reply. Guess I will have to work on my selection of setups.
If my answers frighten you then you should cease asking scary questions.
  • #25,983
  • Jul 16, 2013 3:18am Jul 16, 2013 3:18am
Quoting fx35
{quote} Hi binnie yes that was the plan and sl will move up Thanks
took 50% profit off at 200ma and the rest 50% stop out at Break-even
  • #25,984
  • Jul 16, 2013 3:48am Jul 16, 2013 3:48am
Quoting fx35
{quote} took 50% profit off at 200ma and the rest 50% stop out at Break-even

Awesome Mate Good management. I forgot to mention last time that there was a possible trouble spot just above you - that was the BRN 1.3100 and it was sitting right with the 200ma.
Great result.
  • #25,985
  • Jul 16, 2013 3:56am Jul 16, 2013 3:56am
Quoting edge-t
Hi, Got a few questions here. Been learning about the 4hr MACD for the last 1 week. Not too sure if I made the right decision in shorting AUDUSD yesterday. I used the H4 chart. 8MA was below 21MA, 21 below 89MA---that indicates a strong bearish market rhythm right? Going to the dailys, the trend still appears to be bearish. So, I saw a TC forming on the AUDUSD, candles bouncing off the 21MA. I went to the H1 and made my short entry from there. However, the price went north and took out my SL after another 10-12hrs. I understand that there isn't...
Welcome aboard Edge - If you have a look at post 25969 from yesterday, I too was expecting a possible Short if the H4 Macd would roll over & show me a TC.
On my chart ( Pepperstone ), this never happened. Your chart did signal you the TC and you have followed the rules pretty well IMO. I just wanted to tell you that I would have taken this if I had seen what you were looking at. Unfortunately, you will have to wait for the masters of the H1 entries to give you their comments ( Trademin - Yvon ) is great at explaining this part of the method so I hope he is around shortly to pass on his thoughts on this one.
For me personally, the H4 signal would be sufficient at this stage as I have yet to fully learn H1. The main issue I would have would be whether there was enough clear space to give me at least 1:1 reward. Without your price levels I cannot do any calculations.
I guess this is just one of those trades buddy - nobody likes taking a Loss but it is part of our game
As a matter of interest , can I ask you how much the trade move into profit before turning around ? There is no set rules for this aspect of a trade but I wonder if you considered taking some profit off the table & moving your StopLoss to a BreakEven situation?
Just my opinion .

Looking forward to your posts.
  • #25,986
  • Jul 16, 2013 4:04am Jul 16, 2013 4:04am
Quoting edge-t
{quote} Cool, thanks for the prompt reply. Guess I will have to work on my selection of setups.
BTW Edge - There is so much valuable info on this huge thread ( Page 1300 as at today ). I have found the attached awesome - hope it can help.
Attached File(s)
File Type: pdf The Heart of This System Written Copy.pdf   44 KB | 561 downloads
  • #25,987
  • Edited 9:54pm Jul 16, 2013 6:06am | Edited 9:54pm
AUDUSD long. (.9096)
on 4hrs chart: weak HS,Divergence, I should have waited for the break out of neckline, but went ok.
really oversold since may, on a pull back to weekly fanion? will see...


I got out of trade( .9234)-. pair should pull back to 89, then move away--where I should take a trade there...will see...
Attached Image(s) (click to enlarge)
Click to Enlarge Name: audusd-h4-ava-financial-ltd-hs-os-div.png Size: 65 KB
Click to Enlarge Name: audusd-w1-ava-financial-ltd-really-os-pull-back-to-fanion.png Size: 69 KB
Click to Enlarge Name: audusd-h4-ava-financial-ltd-out-of-trade ..png Size: 64 KB
Yvon
  • #25,988
  • Jul 16, 2013 6:22am Jul 16, 2013 6:22am
EURCHF: short
I took it on a TC, there was a HS under construction. the pair did pull back (to make a HS) now divengence between the shoulders._maybe a break out from 89sma(purple)
if the pair breaks the neck line , projection is about 140 pips down. will see...
Attached Image (click to enlarge)
Click to Enlarge Name: eurchf-h4-ava-financial-ltd-a-move-away-from-hs-tc.png Size: 64 KB
Yvon
  • #25,989
  • Jul 16, 2013 6:24am Jul 16, 2013 6:24am
Quoting binnie
{quote} Welcome aboard Edge - If you have a look at post 25969 from yesterday, I too was expecting a possible Short if the H4 Macd would roll over & show me a TC. On my chart ( Pepperstone ), this never happened. Your chart did signal you the TC and you have followed the rules pretty well IMO. I just wanted to tell you that I would have taken this if I had seen what you were looking at. Unfortunately, you will have to wait for the masters of the H1 entries to give you their comments ( Trademin - Yvon ) is great at explaining this part of the method...
Ah, what a friendly forum. Thanks for the warm welcome, I really appreciate it. The price moved into +20 to +25 pips region before going sour on me. SL was around 50 pips, TP also about the same. Frankly speaking, I had no idea where to set the TP level other than at the long pin bar. I did consider taking some profit off, but if I take profit at +22 pips, wouldn't my R:R be shot? Win rate will probably go up, but I guess I'd prefer at least a 1:1. Still working my way around this system, but I love it so far.

Went through quite a bit on the thread, had a bit of difficulty understanding market rhythm until I listened to lesson 4 a couple of times and watched Phillip Nel's video on Market Rhythm. Slowly getting the idea of market rhythm, but quite some ways from mastering it.

The reason why I posted the trade, was because I wanted opinions from the veterans of this system to tell me if the trade was wrong/right/marginal. Hope to learn more from you people.
If my answers frighten you then you should cease asking scary questions.
  • #25,990
  • Jul 16, 2013 6:26am Jul 16, 2013 6:26am
Quoting trademin
AUDUSD long. (.9096) on 4hrs chart: weak HS,Divergence, I should have waited for the break out of neckline, but went ok. really oversold since may, on a pull back to weekly fanion? will see... {image} {image}
Would you wait for the 89, 21, 8 and price to be above the 200 before deciding to go in? Or is there a way to trade when squeezed between 200 and 89?
If my answers frighten you then you should cease asking scary questions.
  • #25,991
  • Edited 7:53am Jul 16, 2013 7:30am | Edited 7:53am
Quoting edge-t
{quote} Would you wait for the 89, 21, 8 and price to be above the 200 before deciding to go in? Or is there a way to trade when squeezed between 200 and 89?

hi,
what do you mean?
maybe not clear on the chart but target is the 200 and right now there is no squeeze on the AUDUSD. Target is also 61.8%FIB, should go.

Very few lots involve in this trade… I am very busy with my swimming pool these days. I had about 20 min free time and selected 2 trades and just went away!


first part of your question: it all depends on market situations,(as example the AUDUSD is in a possible major turn around,oversold) but to be safe, it would be for a trader to look only for TC. Then when absorb, expend to RT,RB,BOZ, etc. But I know what the feeling is. I found an answer to that.( I'll get back to you on that)


second part of your question:

but a squeeze, I am not looking to trade that situation where 2 barriers involve heavy contraction in trading .(just add the fact that some traders are loaded from way below!)


but squeeze refer to EURUSD, lately. the story is different. If you look back in time, you will see(eurusd 4hrs chart) a HS on macd. The pair broke the neckline. target was inside the squeeze (or 89) - consolidation in there, some people took there profit, some are still holding theres and now waiting for some development. It is now a flag and pair if materialize there, people should expect rapid move up…my view. we will know better after 8:30 this morning

I stayed aside in EURUSD while squeeze.- busy with my Swimming pool! Maybe I left my computer on FF and left- it happens sometime. Sorry if not really involve in trading these days. just realize that you are new here, welcome! It is a nice place here!

with squeeze means also firework to me and if the range covered is not quite large, I then feel to close to firework, I could be hurt!- but some traders would look closely at candles meaning and then take a trade based on that.(!)- not me!- but it is ok to take a look at that possibility.

I have to go out now( yea! swimming pool!) but if you need more answer on that, just let me know, I should answer eventually when time will be available,


welcome again- and I take the occasion to salute all new comers in here. Welcome. It is refreshing for all of us!
Yvon
  • #25,992
  • Jul 16, 2013 8:13am Jul 16, 2013 8:13am
Quoting trademin
{quote} hi, what do you mean? maybe not clear on the chart but target is the 200 and right now there is no squeeze on the AUDUSD. Target is also 61.8%FIB, should go. Very few lots involve in this trade… I am very busy with my swimming pool these days. I had about 20 min free time and selected 2 trades and just went away! first part of your question: it all depends on market situations,(as example the AUDUSD is in a possible major turn around,oversold) but to be safe, it would be for a trader to look only for TC. Then when absorb, expend to RT,RB,BOZ,...
My mistake. Read the chart wrongly---can't remember if I was looking at my EURUSD chart when typing the previous question. Yes, I thought that EURUSD is in consolidation zone atm, since it's trading between, 89 and 200, I thought I should stay out till I see a clear trend and understand how to use the system better.

Currently, I trade mostly trend continuation patterns---i.e. the failed AUDUSD short. Seems like I caught it at right before it reversed and punched through the 21 and 89.
If my answers frighten you then you should cease asking scary questions.
  • #25,993
  • Edited 8:50am Jul 16, 2013 8:39am | Edited 8:50am
Quoting edge-t
{quote} My mistake. Read the chart wrongly---can't remember if I was looking at my EURUSD chart when typing the previous question. Yes, I thought that EURUSD is in consolidation zone atm, since it's trading between, 89 and 200, I thought I should stay out till I see a clear trend and understand how to use the system better. Currently, I trade mostly trend continuation patterns---i.e. the failed AUDUSD short. Seems like I caught it at right before it reversed and punched through the 21 and 89.
you're ok. .
If you look at the squeeze itself: moving averages are straight flat! so . in a sense it is in a consolidation with a weak bearish tendency . when they are flat, traders are facing a rought situation: which way to go?- a flag with flat ma's?- if you look at 21 ema, well it is a TC that just formed earlier, but some got out at top!- not easy situation...still within flat ma's...8:30 went by and nothing yet...humm! that is why squeeze I stay away from them, very good reasons would make me look at those formation... I am waiting at what will be the next momentum (out of squeeze).---trading involve decisions and NOT trading is part of trading decisions too!

The history of the trend is to situate me in front of a possible trade. AUDUSD was having a RB in daily chart and a large period oversold and bullish divergence, while 4hrs chart had a over sold situation with round bottom, also having the price moved away from a previous pull back from a wedge of some sort.- that is why I took it on the long side.
Attached Image (click to enlarge)
Click to Enlarge Name: edge-t.png Size: 324 KB
Yvon
  • #25,994
  • Jul 16, 2013 10:15am Jul 16, 2013 10:15am
Quoting trademin
{quote} you're ok. . If you look at the squeeze itself: moving averages are straight flat! so . in a sense it is in a consolidation with a weak bearish tendency . when they are flat, traders are facing a rought situation: which way to go?- a flag with flat ma's?- if you look at 21 ema, well it is a TC that just formed earlier, but some got out at top!- not easy situation...still within flat ma's...8:30 went by and nothing yet...humm! that is why squeeze I stay away from them, very good reasons would make me look at those formation... I am waiting...
Interesting. So, you look to the daily chart's MACD pattern on whether there's a pattern to go long/short, entry in the H4? In the AUDUSD chart in particular, does it mean you would do a counter-trend trade if there's a divergence? Where you took the long position, the price has already hit the 21MA. You would still take a long position?
If my answers frighten you then you should cease asking scary questions.
  • #25,995
  • Jul 16, 2013 12:14pm Jul 16, 2013 12:14pm
Quoting edge-t
{quote} Interesting. So, you look to the daily chart's MACD pattern on whether there's a pattern to go long/short, entry in the H4? In the AUDUSD chart in particular, does it mean you would do a counter-trend trade if there's a divergence? Where you took the long position, the price has already hit the 21MA. You would still take a long position?
hi,
Interesting. So, you look to the daily chart's MACD pattern on whether there's a pattern to go long/short, entry in the H4?

the idea behind daily or weekly chart is to have a summary, the story up to now. It should be a support to decisions implied in the 4hrs chart.

All goes together it is the same pair, one is a summary, the other, a zoom in, is where I am going to take position or not.-you can take a look at weekly chart: really oversold isn't it?-

In the AUDUSD chart in particular, does it mean you would do a counter-trend trade if there's a divergence?

The AUDUSD pair in the 4hrs chart has an history : there was a breakout from a fanion, then a pull back( or if you prefer:do I want to go down again?) the pull away is saying not wanting to go down (for the moment), rejection of going down, the macd was oversold.

that is in a summary where the pair stands. From that info I do not want to go short, I' ll do my best to find clue in order to buy that thing: round bottom, divergence,etc…


does it mean you would do a counter-trend trade if there's a divergence?

but taking a position on only one hint is not enough, the story is important. Trading can be done because it is based on anticipation, because of a structure. This is why Phillip Nel
strategy has rules and chart set up so traders can evaluate where the market is standing (history). And by knowing that, one can take profit from it.

Just to mention rhythm: when price is moving away from the 21 ema, you can anticipate that it should get back to it before moving away again(making a TC).isn't it?- It is because of the structure that you can anticipate If evidences of turning around is present, one should take that information seriously . It is valid information.


Where you took the long position, the price has already hit the 21MA. You would still take a long position?

I took it!- the story was known already, (the move away from the fanion,rejection)that thing was going to go up.



any comments welcome,
Yvon
  • #25,996
  • Jul 16, 2013 12:33pm Jul 16, 2013 12:33pm
Quoting fx35
{quote} Congrate on the Gold win i took the EU trade "Long" at the expense of 200ma --the price bounce twice off 89ma --the 21ma still hold up the price -sl below 89ema -tp below last week swing high {image}
Hi FX35

Verry nice, it worked out for you!!
Actually it was a very nice trade...
Well it's a chame I didn't took it But anyway I didn't feel comfortable with the price between 89 and 200... Well I learned of it I believe
You can manage risk, but you can't manage the return
  • #25,997
  • Edited 2:47pm Jul 16, 2013 12:39pm | Edited 2:47pm
here is some detail of a trade in EURCHF:

The second chart is before the trade, look at incoherence between the chart and the macd...
no way I was expecting the right shoulder to be higher the the left one.

first chart:
now the HS is completed, what the market will do I don't know, but sure I want it to keep giving me profit. If it doesn't, well, I get out...

but...if divergence between the shoulders, I am expecting the pair to eventualy go down, will see...

15:46hrs edit: now pair teasing with the neck line...
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurchf-h4-oanda-corporation-after-the-trade-in.png Size: 81 KB
Click to Enlarge Name: eurchf-h4-oanda-corporation-before-the-trade.png Size: 76 KB
Yvon
  • #25,998
  • Jul 16, 2013 3:13pm Jul 16, 2013 3:13pm
Thank you, I have learned a lot from these posts. Will need to absorb. I just realised how little I know. For now, it is bed time.
If my answers frighten you then you should cease asking scary questions.
  • #25,999
  • Jul 16, 2013 3:21pm Jul 16, 2013 3:21pm
Hi Guys

Just getting back inot this systems after a few years break. I've got MacD V.104 installed. From my notes I understand what RB = rounded bottom , RT - rounded top, TC - Trend continuation mean but cannot find anywhere in my old notes what VT stands for - any ideas?

Thanks in advance
Ray
  • #26,000
  • Jul 16, 2013 3:33pm Jul 16, 2013 3:33pm
Quoting fxray
Hi Guys Just getting back inot this systems after a few years break. I've got MacD V.104 installed. From my notes I understand what RB = rounded bottom , RT - rounded top, TC - Trend continuation mean but cannot find anywhere in my old notes what VT stands for - any ideas? Thanks in advance Ray
what about V top?

welcome back fxray
Yvon
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