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4 Hour Strategy (MACD)

  • #27,761
  • Jul 1, 2014 1:41pm Jul 1, 2014 1:41pm
Quoting binnie
UPDATES: Kiwi - Love the 3 TOOTS Yvon. You are so right though. Generally I will never hear 1 toot on the car horn BUT if someone toots 3 times - well I tend to turn my head to see whats happening. {image} {image}

thanks for the comments, I like making comparisons
Yvon
  • #27,762
  • Jul 1, 2014 2:11pm Jul 1, 2014 2:11pm
Quoting Mathus
I see a setup on CHFJPY. I dont know if this is a pair that anyone trades. Not even sure if MarketRhythm has been tested on this pair. Let me also know if i should stick to a list of pairs. I am very excited about trying out what I am learning here. But I dont want to create noise and become a destraction. Here goes, let me know what you think. {image} Break through 89sma Expecting pullback to 21ema MACD RT? I see a candle with a long head; spinner? Entry 114.43, Target 114.13
Good morning Mathus - congrats on the success. Nice feeling .
I want to tell you what I think about the SwissYen you are looking at.
Apart from the very obvious that it is a CT, there are a few things you need to decide on. Have a look at the Weekly Chart - what do you see as Rythym?
Price is way above the 89 and the 89 is in a strong rising motion. Therefore I would need to see a real compelling reason to short against this one. Is there good reason on the H4 chart - IMHO no... Remember that the rules allow for a CT trade where there is rejection from a very strong level. This could be an historical T/Line, BRN, solid Support & Resistance. On this pair I cannot see any of these.
You are correct that price will eventually find its way back to the 21 but at the moment it is riding the 8ma which is the fast pace. The 8ma is spacing itself from the 21 so the rules say that sooner or later it will need to take a breather and will ride back down to the 21. As we know well enough, Price will not continue upwards forever. The turning of the Macd is only a hint that momentum MAY be slowing but we still must have Price show us its plan. There is no wall there at the moment that will turn price around. Not saying you will not be right but the odds are not in your favour. This is really just a random bet in the middle of current price action.
Hope this helps buddy. Just compare the successful trade you had to this one - can you see the difference ??
Safe pips my friend. Keep posting your ideas & it does not matter what currency pairs you are looking at. It is all relevant to our learning.

I am just heading out for 1/2 hour or so but would like to talk about your questions on pairs to trade etc. Will get that done shortly.
  • #27,763
  • Jul 1, 2014 2:53pm Jul 1, 2014 2:53pm
Quoting binnie
{quote} Remember that the rules allow for a CT trade where there is rejection from a very strong level. This could be an historical T/Line, BRN, solid Support & Resistance. On this pair I cannot see any of these.{quote}
Thank you Binnie. What you say makes absolute sense. And the key takeaway for me is your comment on the CT "the rules allow for a CT trade where there is rejection from a very strong level....". Not sure I read it, or maybe i just didnt retain it. I am still reading the pdfs and listening to Philip's audio recordings. There is a lot, and I am trying to internalize these concepts, with varied success.

I cannot say how much I appreciate the time you take in verifying my ideas, pointing out the rules missed. Thank you.
  • #27,764
  • Jul 1, 2014 3:37pm Jul 1, 2014 3:37pm
@ Mathus

Things to consider for creating your trade basket.
Your time zone - where do you live , what currencies are active at your awake hours.
Do these pairs have acceptable spreads.
Is there good volatility or movement in these pairs.
Are your pairs co-related ( do they move generally in the same direction ).


EG: I am in NZ so my trading pairs are Aussie & Kiwi. My markets open at 9.00am my time so this coincides with my H4 bar close as well. I also have Euro & Pound on my main page & this generally moves into action at London Open which also suits my NZ time after dinner in the evening. This gives me 2 sessions to watch and on average I am chart watching for 2hrs in the morning and again after dinner around 9pm. I also like to have a quick check at 1pm and 5pm Candle changes to see if my plans need revising.

Then on another workscreen, I have most other pairs available to look at purely for discussion purposes on this thread .
Just ask if I can help further.

Cheers
  • #27,765
  • Jul 1, 2014 7:50pm Jul 1, 2014 7:50pm
Quoting binnie
@ Mathus Things to consider for creating your trade basket.
Thanks for your inputs Binnie.

I spend an hour in the morning from 4:30 to 5:30 and then about two hours between 6:00 and 10:00. So i get the european session in the morning and the asian session in the evening.

I dont really have a trade basket yet. To start with I will pick eur/usd, gbp usd, aud/usd , nzd/usd, usd/jpy, and chf/jpy.

Cheers.
  • #27,766
  • Jul 1, 2014 8:10pm Jul 1, 2014 8:10pm
Quoting binnie
@ Mathus Things to consider for creating your trade basket. Your time zone - where do you live , what currencies are active at your awake hours. Do these pairs have acceptable spreads. Is there good volatility or movement in these pairs. Are your pairs co-related ( do they move generally in the same direction ). EG: I am in NZ so my trading pairs are Aussie & Kiwi. My markets open at 9.00am my time so this coincides with my H4 bar close as well. I also have Euro & Pound on my main page & this generally moves into action at London Open which also...
What is an acceptable spreads, that you mentioned? Some traders commented that the success rate of trading on Monday is not high? As well as Friday afternoon?
  • #27,767
  • Jul 1, 2014 8:27pm Jul 1, 2014 8:27pm
Quoting nic73
{quote} What is an acceptable spreads, that you mentioned? Some traders commented that the success rate of trading on Monday is not high? As well as Friday afternoon?
Spreads vary between brokers - when there is less liquidity the spreads can often be widened so it depends on the market hours you are in. Right now for instance, my spreads are between 1.5 and 2.0 for aussie,kiwi,euro & pound. I would like to see these kept under 3.0 .
Monday can be a slow day but IMHO it is safer than a Friday. Friday can see profit taking happening as traders wind down for the week.
Just my 2c worth - not sure what others think.
  • #27,768
  • Jul 1, 2014 8:48pm Jul 1, 2014 8:48pm
Saw this chart from Yvon / Trademin's post and I have these question to ask. Richard has already helped me to understand what BOZ is but a need a little more help and confirmation that I have understood about the market when it break the zero MACD Level.

1. When market breaks the MACD zero level, this is a confirmation that price has broke / moving away from the 21ema, is that correct?
2. When market breaks the MACD zero level, a trade can be taken but one has to wait for that that particular candle to close to confirm that is it moving away from 21ema?

Attached Image (click to enlarge)
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  • #27,769
  • Jul 2, 2014 1:58am Jul 2, 2014 1:58am
Quoting Mathus
{quote} Thank you Binnie. What you say makes absolute sense. And the key takeaway for me is your comment on the CT "the rules allow for a CT trade where there is rejection from a very strong level....". Not sure I read it, or maybe i just didnt retain it. I am still reading the pdfs and listening to Philip's audio recordings. There is a lot, and I am trying to internalize these concepts, with varied success. I cannot say how much I appreciate the time you take in verifying my ideas, pointing out the rules missed. Thank you.
In my experience, reading, listening watching webinars are all good and taking notes, but usually you miss some clues.

The only way for me is do or die and then post on here and let people help you, therefore discovering the rules through your own actions, which really reinforces them.

ie, after so many years I have known the HS formation from nearly day one, but i have never really used it, as i got distracted by other things.

But now with Binnie and Yvon on board again, i am only looking at this formation and getting to grips with it properly.

I am cheating a little and using Binnies example on the NZD...instead of trying to find my own.

I am in a position now, when i don't feel like i have to trade everyday and can just concentrate on one method at a time instead of jumping around.

This is my personal journey, i appreciate everyone is different, but it works for me.

So my advice for what its worth, post everything you can and learn from others on here.
  • #27,770
  • Jul 2, 2014 2:05am Jul 2, 2014 2:05am
In the trade early but learning through my actions.

DT.
sHS
break of neckline
BPM in action.
Macd not showing us yet..

a candle closed under the 21 but macd still positive...not a clever decision.

I know i am in too early but i am watching this unfold as i have opened a trade...concentrating on this alone, no distractions.

Three toot toot toots...and bang... it has now got my attention.
Attached Image (click to enlarge)
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  • #27,771
  • Jul 2, 2014 4:02am Jul 2, 2014 4:02am
Quoting yaakruay
{quote} In my experience, reading, listening watching webinars are all good and taking notes, but usually you miss some clues. The only way for me is do or die and then post on here and let people help you, therefore discovering the rules through your own actions, which really reinforces them. ie, after so many years I have known the HS formation from nearly day one, but i have never really used it, as i got distracted by other things.
Agree with you Richard.

I also learn best by doing. I am hoping to internalize a base set of rules and then keep adding to the list.
  • #27,772
  • Jul 2, 2014 4:18am Jul 2, 2014 4:18am
Here is a setup on USDJPY.
The 8ema had pulled back up to the 21.
The last two candles were bearish.
The MACD had turned down two candles back.
Is this a valid setup for a short trade. Is it too late to enter this trade. Entry 101.46, target 101.26.
Attached Image
  • #27,773
  • Jul 2, 2014 7:28am Jul 2, 2014 7:28am
Quoting Mathus
Here is a setup on USDJPY. The 8ema had pulled back up to the 21. The last two candles were bearish. The MACD had turned down two candles back. Is this a valid setup for a short trade. Is it too late to enter this trade. Entry 101.46, target 101.26. {image}
Stop loss hit at 101.60.

Was that a valid trade according to the rhythm?
  • #27,774
  • Jul 2, 2014 7:36am Jul 2, 2014 7:36am
Got killed on this one. Again. Can someone tell me what I have done wrong?
Attached Image (click to enlarge)
Click to Enlarge Name: NZDUSD.png Size: 25 KB
  • #27,775
  • Edited 12:40pm Jul 2, 2014 10:27am | Edited 12:40pm
here is a an active trade in EURGBP... question welcome, nice rhythm .

edit: on the 4hrs chart:
The last 2 candles with littles circles on their tails are showing a push down, but without their tails it is a oopps or a train station and many other names I guess, just means that it is a temporary wrong direction and that is why it is above the trend line here, then the price just got back below that trend line, back into the rank.
EDIT: trade closed 71 pips-hit by the SL
The second chart shows a nice TC in the Daily chart.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: HS a Beauty-5.png Size: 120 KB
Click to Enlarge Name: HS a Beauty-6.png Size: 108 KB
Yvon
  • #27,776
  • Edited 5:21pm Jul 2, 2014 11:40am | Edited 5:21pm
Quoting Mathus
Here is a setup on USDJPY. The 8ema had pulled back up to the 21. The last two candles were bearish. The MACD had turned down two candles back. Is this a valid setup for a short trade. Is it too late to enter this trade. Entry 101.46, target 101.26. {image}

There are many views to this.
But It gets easier when I do a full story of the chart.
Sure I am watching that pair…to make a Pull Back to the neck line or trend line above. This is one point, the second I just keep lines and drawing on a chart so I get the story in a quick look, just in case I have to get back to it later. A third point would be the downtrend channel that I draw earlier, so I see the price hitting the lower trend line, so I should expect the price to bounce on it( which it did). Another point is the divergence on the MacD that supports the idea of a bounce there at that trend line. And maybe just adding another point that tomorrow is NFP that could make a quick change in all pairs! (Almost!)
Now the price just hit the trend line (neckline) and then I should expect or anticipate a bounce on it or if you prefer a weakness in the USD…but the USD(index) just got a bounce up! It is not a weakness!And not only that: the price just hit the 89sma, now I have to wait. Will it cross it?
I sit on my 2 hands for now…

Add: but if it crosses, what should I expect? Sure a pull back to it and a move away. Then the target would be appreciatively 102.75, the approximate range covered by the channel. It Would bring the pair back on the beginning of June’s high eventually.
Attached Image (click to enlarge)
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Yvon
  • #27,777
  • Jul 2, 2014 3:08pm Jul 2, 2014 3:08pm
KIWI causing problems:

Hi Guys - I see some issues with the Kiwi trades. I too entered last nite and then headed for bed. I was aware of some USA employment news due overnite but was happy to trust what price had just shown me.
The anticipation was for a break below the H & S neckline followed by a pullback then Move Away. The breakout & close under the neckline did happen BUT the next candle made a bullish return and actually closed above the 21ma ( back inside the H & S pattern ). To me this signalled - hey, just wait a minute. What is the rythym telling me? There might be an indication that price really does want to go higher so my expectations changed completely. Now I am looking to go long at the close of the bullish bar above the 21 and my confirmation was the ZB on the macd. Price pushed a bit higher before the US news came out ( good news too ) so the bearish retreat was as a result of that news announcement. Things seem to have settled since and the last 2 candles have remained semi bullish.
My trade is still open.

Richard - I know you already have given yourself a wee uppercut for entering early. There is not much to add. It confirms that price will tell us where it wants to go and it don't give a stuff about what we want. You'll bounce back mate -

Nic - For the reasons above IMHO you saw what I saw and acted on it. I think the issue for your trade was the Stoploss you set. It was not quite large enough. I set mine back under a recent Resistance level and this is still holding. Price currently bouncing around the neckline Resistance so I am not sure yet where we are going. Decision made so I have to ride it out I guess.

Attached Image (click to enlarge)
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  • #27,778
  • Jul 2, 2014 3:52pm Jul 2, 2014 3:52pm
Quoting Mathus
Here is a setup on USDJPY. The 8ema had pulled back up to the 21. The last two candles were bearish. The MACD had turned down two candles back. Is this a valid setup for a short trade. Is it too late to enter this trade. Entry 101.46, target 101.26. {image}
Morning Mathus,
Yvon has given a really nice explanation of his anticipation for this pair. Can I add my view too

At the end of a run down if price breaks back up through the 21ma there is an expectation that it will return to the 21 before moving away to hunt out the 89.
My view is that Rythym has shown itself here pretty clearly ( as it always is after the fact LOL). With the minor divergence showing I will be watching for a bullish move here and after a few bars we saw a pullback to the 21 and a nice TC on Macd.
Would I enter here even with the nice signal - NO.
Reasons are:
large bullish candle compared to previous ones ( 35pipos).
R:R minimum 1:1 is not possible because of the 89 & 200 levels just 10 & 20 pips above.

Sitting on hands is best action here. But the setup IMHO was a nice one. If that large Bullish bar was a bit smaller, I would be interested in playing for 20 odd pips. Plenty more trades to find.

Attached Image (click to enlarge)
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  • #27,779
  • Jul 2, 2014 8:29pm Jul 2, 2014 8:29pm
Yvon and Binnie, Thank you for your insights. I am beginning to see how my "perfect trade setups" are anything but.

And I used to think that even when i enter these perfect setups the "big players" were doctoring the market to hit my stops. I never understood why these big players were working so hard to steal my 10cent pips...

A key takeaway is "do not take a long if i cannot have at least a 1:1 ratio after keeping the stop loss below previous candle. (above previous candle if it is a short position)"
  • #27,780
  • Jul 2, 2014 8:30pm Jul 2, 2014 8:30pm
I have posted questions on posts 27768 and 27774. Can someone help me please. Thank you.
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