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4 Hour Strategy (MACD)

  • #28,201
  • Aug 17, 2014 3:17pm Aug 17, 2014 3:17pm
Quoting nic73
Last week was a difficult week to trade. Lost pips and trades UNEXPECTEDLY. I thought I have done my analysis before trading. I took trades that were moving away from 21ema supposedly the high probability trades but they went against my analysis, that's why I say Unexpectedly. Did any of you expert here foresee the volatility of the market before it went volatile? Is there a way to tell this is coming? Would appreciate if some of you experienced traders here can help me with this. Thank you. Desperately searching for answers, Nicholas

I have cut back on trading sometimes to 1 or 2 trades per week, I don't search out trades everyday any more like my life depends on it....

Were you over trading, i find 1 open trade is enough 2 is maximum at any one time.

Trading is snakes and ladders..... just as you think the last roll of the dice will get you over the finish line.......boom... you land on a snake! (this is my trading)

I landed on a few snakes the week before after rolling a few sixes and climbing the ladders, then boom back to square one!

Just keep at it..

See JP nice easy style searching out those waves..abcd..patterns.....etc
(you can get this analysis for free if you sign up to some brokers)

I have access to autochartist for free from signing up with a real broker (put £100 into their account).

..Do you use analysis from other sources to confirm your own thoughts?
  • #28,202
  • Edited 11:04pm Aug 17, 2014 8:20pm | Edited 11:04pm
Quoting yaakruay
{quote} I have cut back on trading sometimes to 1 or 2 trades per week, I don't search out trades everyday any more like my life depends on it.... Were you over trading, i find 1 open trade is enough 2 is maximum at any one time. Trading is snakes and ladders..... just as you think the last roll of the dice will get you over the finish line.......boom... you land on a snake! (this is my trading) I landed on a few snakes the week before after rolling a few sixes and climbing the ladders, then boom back to square one! Just keep at it.. See JP nice...
I was only in my 1st and 2nd trade for the week and I was done with those trade in a short time. I trade one at a time and yes usually I only get to trade 1-2 trades or max. 3 a week. And for me to spot 3 trades a week is rare.

No I don't use analysis from other sources. JP 123 wave, I have not understood it well enough to implement it. Still trying.
  • #28,203
  • Aug 17, 2014 8:33pm Aug 17, 2014 8:33pm
Have here GBPUSD. There was a gap and market jumped to open above 21ema. What that mean? At the meantime, am waiting for BPM to form to take the trade.
Attached Image


AUDUSD, together with EURUSD, AUDNZD and NZDUSD look like these markets are clustered around the moving averages. Perhaps it need to clear away from this area before considering any trades? It gives me the feeling of a plane flying through patches of thick, dense and very dark clouds where turbulence is imminent. So it's a dangerous area to fly in.
Attached Image

Do you guys agree?

Nicholas
  • #28,204
  • Aug 18, 2014 1:07am Aug 18, 2014 1:07am
EUR/NZD W1 call for the new week. Price move from 21.
Attached Image (click to enlarge)
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  • #28,205
  • Edited Aug 19, 2014 12:49am Aug 18, 2014 1:34am | Edited Aug 19, 2014 12:49am
Quoting nic73
Have here GBPUSD. There was a gap and market jumped to open above 21ema. What that mean? At the meantime, am waiting for BPM to form to take the trade. {image} AUDUSD, together with EURUSD, AUDNZD and NZDUSD look like these markets are clustered around the moving averages. Perhaps it need to clear away from this area before considering any trades? It gives me the feeling of a plane flying through patches of thick, dense and very dark clouds where turbulence is imminent. So it's a dangerous area to fly in. {image} Do you guys agree? Nicholas

The gap, is usually closed in the week, so expect a small movement down at some time to close the difference (not guaranteed, immediately) the last time i traded the gap i got stopped out and it took 5 days to close the gap!

At least this is what the text books teach. You will have to research as to why it happens.

The turbulence is correct, we are waiting for the fog to clear....nice..i like it.....

ps. My favourite would be the Aud/USD do go up...but what do I know?
  • #28,206
  • Aug 18, 2014 4:05am Aug 18, 2014 4:05am
hi everyone!

I too am trading gbp/usd and a gap appear earlier today because of this news over the weekend
http://www.fxstreet.com/news/forex-n...7-a9e45857102b

Happy trading everyone!
  • #28,207
  • Aug 18, 2014 4:06am Aug 18, 2014 4:06am
Quoting nic73
Have here GBPUSD. There was a gap and market jumped to open above 21ema. What that mean? At the meantime, am waiting for BPM to form to take the trade. {image} AUDUSD, together with EURUSD, AUDNZD and NZDUSD look like these markets are clustered around the moving averages. Perhaps it need to clear away from this area before considering any trades? It gives me the feeling of a plane flying through patches of thick, dense and very dark clouds where turbulence is imminent. So it's a dangerous area to fly in. {image} Do you guys agree? Nicholas
Here is the reason why there is a gap that form earlier today:
http://www.fxstreet.com/news/forex-n...7-a9e45857102b

Happy trading everyone!
  • #28,208
  • Aug 18, 2014 6:38am Aug 18, 2014 6:38am
Quoting JonnyPip
{quote} Hi Nic, Sorry I will try to explain a bit better This is simply how I look for an entry when the price pulls back to the 21ema in the 4h chart. As per rules, price pulls back to 21ema in 4 hour chart and gives signal to either buy or sell as it turns away from 21 ema. If you go down to a smaller time frame like the 1h chart, the pullback in the 4h chart often will break down into 3 waves in the lower chart and will look like a break above the 21ema, pullback, and move to 89/200 sma (in 1h chart). So wave a b and c are all AGAINST the trend...
Hi Jonny,

I think I have finally make sense of 123 Wave. After spending the whole of Monday on it, here is what I have. Can you please advice if my understanding of it. Thanks in advance.

Nicholas
Attached Image (click to enlarge)
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  • #28,209
  • Aug 18, 2014 6:41am Aug 18, 2014 6:41am
Attached Image (click to enlarge)
Click to Enlarge Name: E U 2.png Size: 23 KB


EUR USD H4.

Right, lets see.

At A and B there is a tweezer bottom.
There's a HH.
The last two bars, prize bounce of MA21.

Put Buy Stop at thin red line with SL just under
and TP at green line above.

Aggressively you can buy now.

What can we chance about this outlook?
  • #28,210
  • Aug 18, 2014 8:50am Aug 18, 2014 8:50am
Quoting ronfrias
{quote} Here is the reason why there is a gap that form earlier today: http://www.fxstreet.com/news/forex-n...7-a9e45857102b Happy trading everyone!
Thank you Ron. So you trade GBPUSD. What are your thoughts on the pair and my analysis?

Nicholas
  • #28,211
  • Aug 18, 2014 1:18pm Aug 18, 2014 1:18pm
Quoting LaGrangeD
{image} EUR USD H4. Right, lets see. At A and B there is a tweezer bottom. There's a HH. The last two bars, prize bounce of MA21. Put Buy Stop at thin red line with SL just under and TP at green line above. Aggressively you can buy now. What can we chance about this outlook?
Hi LaGrange,

Don't forget it is important to always look at the longer term picture.

When the price is trading above the 21ema that simply suggests it is in an up trend. But the uptrend can be a minor correction on a bigger chart, so you think you are trading with the trend (and you are short term) but actually overall you are going counter trend and so you are either haveto make a quick profit assuming the R:R is there, or get stung. As you can see I took a short sell just before it broke out as looking at the daily you can see this recent long (up/buy) run was a minor correction in the bigger down move. So yes it was in an up move but it was the end of that correction. But also the end of that up trend can often by these rules be shown by a pullback to the 89sma, which is what happened here. So the "mood" was still short.

If I miss getting in before price breaks out I don't feel that I have missed out I just see it as a sign the price is now moving again and the markets ready to give you a chance to make some money.

Now price has broken down I will be looking to add to the position on a pullback to the 21ema at some point(s). So there should be a couple more chances yet to get involved (assuming it doesn't do a u-turn on some big news/event!)

That's my view anyway

Hope this helps

JP
Attached Image (click to enlarge)
Click to Enlarge Name: Eur Usd 18.08.14 4h.png Size: 87 KB
  • #28,212
  • Aug 18, 2014 1:21pm Aug 18, 2014 1:21pm
Quoting LaGrangeD
{image} EUR USD H4. Right, lets see. At A and B there is a tweezer bottom. There's a HH. The last two bars, prize bounce of MA21. Put Buy Stop at thin red line with SL just under and TP at green line above. Aggressively you can buy now. What can we chance about this outlook?
hmm , I think the TB could be broken to the downside.
  • #28,213
  • Aug 18, 2014 1:38pm Aug 18, 2014 1:38pm
Quoting nic73
{quote} Hi Jonny, I think I have finally make sense of 123 Wave. After spending the whole of Monday on it, here is what I have. Can you please advice if my understanding of it. Thanks in advance. Nicholas {image}
Awesome Nic

You got it buddy. And when the 4h pulls back to the 89/200 you are looking at a pullback to the 21ema in the daily, and so on.

Sometimes wave a will pullback nearly all the way to the 21ema in the 4h (89/200 in 1h/30min), people sell because its @21ema in 4h, price moves lower (but is just the wave b pullback to 21ema in 1h/30 mins), price moves up and stops them out before heading lower. People lose confidence and wonder what they have done wrong. They have just simply entered too early.

This should filter out quite a few bad trades for you. Although I must stress this is a very basic look at the waves they can get very complex so don't be thrown off it doesn't happen exactly like that every time as it wont. But you will spot it when it does and when everyone else is selling/buying you will be waiting for it to do the opposite

You can even trade it if your nimble enough but you should read up about the different waves and their properties before taking that trade as it's high risk because if you are correct the end of that move is the start of the bigger move in the other direction. R:R isn't always there either

Plus doing this actually allows you to enter (using the same macd trigger) in the lower time frames meaning you are risking a lot less per trade AND potentially entering earlier so you stand to gain more profit.

Hope this helps
  • #28,214
  • Aug 18, 2014 3:01pm Aug 18, 2014 3:01pm
Quoting JonnyPip
{quote} Awesome Nic You got it buddy. And when the 4h pulls back to the 89/200 you are looking at a pullback to the 21ema in the daily, and so on. Sometimes wave a will pullback nearly all the way to the 21ema in the 4h (89/200 in 1h/30min), people sell because its @21ema in 4h, price moves lower (but is just the wave b pullback to 21ema in 1h/30 mins), price moves up and stops them out before heading lower. People lose confidence and wonder what they have done wrong. They have just simply entered too early. This should filter out quite...
Hi JP - after Nic's homework on the weekend I think I am starting to see this also. I used the H1 even tho you sometimes show the M30. Can you let me know if this is close to what you are saying please? If the 89 ( 161extn ) is tagged on the H1 & price rolls down with a bearish close, is that sufficient to try a short if it appears before the TC on H4 macd? Or is there another trigger on the H1 macd still to come. Sometimes it seems as if the H4 trigger could happen before the H1 ( or M30) but by waiting for these shorter T/Frames we are helping to eliminate some early entries which could take us out before market is ready to accomodate our trades. Cheers JP.

Attached Image (click to enlarge)
Click to Enlarge Name: EURCHF_for_JP_19_aug.png Size: 60 KB
  • #28,215
  • Aug 18, 2014 3:53pm Aug 18, 2014 3:53pm
Quoting binnie
{quote} Hi JP - after Nic's homework on the weekend I think I am starting to see this also. I used the H1 even tho you sometimes show the M30. Can you let me know if this is close to what you are saying please? If the 89 ( 161extn ) is tagged on the H1 & price rolls down with a bearish close, is that sufficient to try a short if it appears before the TC on H4 macd? Or is there another trigger on the H1 macd still to come. Sometimes it seems as if the H4 trigger could happen before the H1 ( or M30) but by waiting for these shorter T/Frames...
Hi Binnie,

Nailed it as well bud

I don't usually look at the Eur/Chf as they tend to trade together so it can get a bit choppy

I have broken down what I think will happen for you below on the 4h and 30 mins and got pretty much the same thing.

How cool is it to see that the market rhythm fits in perfectly with the way the market moves in waves? The clarity at times can be amazing, like reading a book.

The chart you have chosen seems to be a perfect example as now seems like the "perfect" time to sell (as per rules) as it has pulled back, but I believe it will move down from here by about 50-68% then head up again to the 21 more than likely taking out anyone who enters now or on the next macd signal/candle down. As you rightly say this should be a pullback to the 89 in the hour/30mins chart.

If you look closely it seems in the 30 min chart this pullback will break down into 5 waves not three, suggesting it is in fact likely to follow the path I have laid out.

You have to remember though that any news or event can send this shooting down/up and could blow all of this out of the water and nothing is guaranteed as I am sure you know.

I use a few different techniques for entry but generally speaking it should just give a standard macd double top/h&s as outlined with the rules. The rules apply no matter what time frame.

I guess we will see how this one pans out but it seems to be the perfect candidate. I will be keeping an eye on it. Thanks for the heads up

You will see entry in the lower time frame will reduce your s/l and risk as well. Which ultimately for me is the main basis for each trade
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Eur Chf 4h 18.08.14.png Size: 82 KB
Click to Enlarge Name: Eur Chf 30 min 18.08.14 (2).png Size: 79 KB
  • #28,216
  • Aug 18, 2014 8:51pm Aug 18, 2014 8:51pm
Quoting JonnyPip
{quote} Awesome Nic You got it buddy. And when the 4h pulls back to the 89/200 you are looking at a pullback to the 21ema in the daily, and so on. Sometimes wave a will pullback nearly all the way to the 21ema in the 4h (89/200 in 1h/30min), people sell because its @21ema in 4h, price moves lower (but is just the wave b pullback to 21ema in 1h/30 mins), price moves up and stops them out before heading lower. People lose confidence and wonder what they have done wrong. They have just simply entered too early. This should filter out quite...
Great job Jonny..... your hard work with all the explaining pays off.

I have understood the basic. Now it's time to implement but identifying the zig-zag pattern on the real chart is not exactly a simple task. It requires a bit of experience and training of the eyes to identify the pattern, especially in a volatile market.
  • #28,217
  • Aug 19, 2014 2:31am Aug 19, 2014 2:31am
Quoting nic73
{quote} Great job Jonny..... your hard work with all the explaining pays off. I have understood the basic. Now it's time to implement but identifying the zig-zag pattern on the real chart is not exactly a simple task. It requires a bit of experience and training of the eyes to identify the pattern, especially in a volatile market.

I've just googled Elliot wave and using the macd and some nice reads came up..
Sorrry no time to post links now as late for work...

But it looks a nice way to use the macd / this system / and an easy approach with elliot waves...

Lots more reading to do..

Thanks to all on the thread.....
  • #28,218
  • Aug 19, 2014 2:39am Aug 19, 2014 2:39am
Jonny / Binnie / Richard / anyone interested,

Can I trouble you to enlighten me how you would trade GBPUSD implementing the 123wave with the 4h MACD system? Thanks
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD_H4_19_Aug_2014_123wave.png Size: 34 KB
  • #28,219
  • Aug 19, 2014 2:43am Aug 19, 2014 2:43am
Quoting yaakruay
{quote} I've just googled Elliot wave and using the macd and some nice reads came up.. Sorrry no time to post links now as late for work... But it looks a nice way to use the macd / this system / and an easy approach with elliot waves... Lots more reading to do.. Thanks to all on the thread.....
Great! Post the links when time allows you. Thanks
  • #28,220
  • Aug 19, 2014 5:31am Aug 19, 2014 5:31am
Quoting nic73
Jonny / Binnie / Richard / anyone interested, Can I trouble you to enlighten me how you would trade GBPUSD implementing the 123wave with the 4h MACD system? Thanks {image}
No problem Nic I hope it helps you to time you entries better like it does with me. You should see it pop up more and more

The Gbp/Usd is a good one for why the market rhythm is important. If you look at the 30 min chart the break above the 89sma, break below 89sma and then move up to the 200sma is very messy. Take away the moving averages and it is going to be very difficult to workout the wave count. But put up the macd system and like magic it will show you!

We know from the rules price will tend to break above the 89sma (this must be wave a) pullback to the 89sma (wave b) move onto the 200sma (wave c)

So by the time it has reached the 200sma we know it has likely already made the abc retrace even if it looks so messy we can't pin point the exact waves.

As you can see in the 30 min once it has reached the 200ma it gives an abcd set up AND a macd 1 2 3 (trigger) signal. Entering shot at the end of the b wave is asking for trouble at any other time because it is completely against the trend. But we know in the 4h chart it has pulled back to the 21ema and so now, as per rules, is likely to head down from here. Meaning anyone buying at that point, even though the short term 30min trend is up (even at its peak), is actually going counter trend.

There should be more chances on the pullback to the 21ema in the 4h if you are not involved yet though
Attached Image (click to enlarge)
Click to Enlarge Name: GBP USD 19.08.14 30min.png Size: 92 KB
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