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4 Hour Strategy (MACD)

  • #29,341
  • May 9, 2016 11:35am May 9, 2016 11:35am
Quoting JonnyPip
Hi Gabryus, Good job, they studying of the methodology will pay off Sticking to the 4h and 1h time frame is going to get the best results, I sometimes go down to a 15m, rarely a 5m just to get a deeper analysis, but ultimately the 4h and 1h are of higher importance. I also check the daily and weekly to get an overal picture, perhaps the monthly if necessary. The MACD is not as important as the market rhythm, it mainly helps to show divergence which tells you the move could be slowing down. It doesn't mean it is going to reverse, often...
Ok I got it, honestly I was trying to follow MACD 4h end only waiting for the "right" moment entry.
Also I thought that 1H was good only on TC in support on strategy based on 4H but I guess at the end you totally right, what really matter is be able to read the market and his rhythm. Let me have a look to your trades... sure will be back with some question
  • #29,342
  • May 9, 2016 12:05pm May 9, 2016 12:05pm
Quoting JonnyPip
{quote} Hi Gabryus, Welcome my friend There is a lot of information provided in this thread, I would strongly recommend any new traders studies it very carefully. All the information needed to be successful is right here. Very kindly put together by Phil Nel over a long period of time. Here is a good opportunity I see for this week, one of the better ones in my opinion Rhythm - break 21/89, pullback, move to 1.41 level/1.42 level. {image}
Hi Pip,

so here clear just one question: you expect price to move to those levels 1.41 - 1.42 cause finding support on previous band pick, is it correct?
  • #29,343
  • May 9, 2016 12:11pm May 9, 2016 12:11pm
Quoting JonnyPip
Another potential set up for this week. Rhythm, pullback to 21ema, continue to 77.50 level. There is divergence to notice in this pair as well which means it may continue to correct for a while longer before moving off. It is almost like resetting itself before the next move. Sometimes this can even mean a pullback to the 89 sma but not necessarily. {image}

Not clear how you determine 77.50 level, right now price on E21 (79.3) and 89 at around 82.948
how you can determine what should be move now?
If breakking up then again to price and touching 89 (probably) if not? and especially when?

PS I try to ask to you but, of course if too questions and too idiot easily let me know!
  • #29,344
  • May 9, 2016 12:23pm May 9, 2016 12:23pm
Quoting JonnyPip
One to watch GBPAUD If the two set ups posted above play out, we should also see some higher moves in the GbpAud this week. Here are some levels to watch out for if we get the anticipated moves in the other pairs. Pullback to the 21ema, move away (to round number) is the market rhythm set up we are looking for. {image}

Maybe I got this,
you are seeing the price continuing with same trend till touching again the 21 and projecting that is the price (I guess).
At that point what are you expecting, price to break out the 21 come back and then move to 89?
  • #29,345
  • May 9, 2016 12:27pm May 9, 2016 12:27pm
Hey no problem Gabryus

Happy to help

The more you do it and look at the charts the more the rhythm will jump right out. Not only that you will also be able to see what rhythm is strong, as well as looking at the ones which are weaker set ups and learning to ignore them.

If you have to stare at the chart for 30 minutes just to try and work out the rhythm, it probably isn't worth trading or is ranging and bouncing around.

This is very important as not all signals should be traded. The reason traders struggle with this is usually, as I have said before, they cannot bear to leave a trade and then watch it go where they thought it would go originally. They think "argh I missed the trade and it was right" but in reality they missed the trade because it wasn't clearly showing its rhythm. So guess what, even though it went where it looked like it might, you still did the right thing by skipping at the time of the trade it wasn't clear. By doing this, in the long run you are stacking the odds on your side by taking higher probability trades. Many new traders struggle with that concept and actually that poor psychology can single handedly destroy many traders and stop them from ever being successful. That's why I mention it often.

  • #29,346
  • May 9, 2016 12:37pm May 9, 2016 12:37pm
Quoting Gabryus
{quote} Not clear how you determine 77.50 level, right now price on E21 (79.3) and 89 at around 82.948 how you can determine what should be move now? If breakking up then again to price and touching 89 (probably) if not? and especially when? PS I try to ask to you but, of course if too questions and too idiot easily let me know!
The market respect the round numbers such as 77.00, 78.00 is Audjpy. They also respect .50 numbers hence why I mention the area around 77.50.

Price in the AudJpy 4h chart is is in a down trend, pulling back to the 21ema and making moves lower. I therefore expect this to continue, it doesn't mean it necessarily will but that it the higher probability. Therefore I am expecting another move lower after this new pullback to the 21eama. If the price doesn't give a nice set up here it could break above the 21ema signalling a move higher. The rules of this methodology are there to keep you on the right side of the price. i.e, below the 21ema and 89sma is bearish (As the AudJpy is now). Only if it breaks above the 21ema would that be the first indication of some buyers starting to come in and push prices higher.

Hope this makes sense
  • #29,347
  • May 9, 2016 12:55pm May 9, 2016 12:55pm
Quoting Gabryus
{quote} Maybe I got this, you are seeing the price continuing with same trend till touching again the 21 and projecting that is the price (I guess). At that point what are you expecting, price to break out the 21 come back and then move to 89?
Yes if price is below the 21ema and the 89sma, you are looking to take sells. If you take a sell and price turns around, breaks above the 21ema and stops you out then no problem. The rhythm is now telling you to potentially look for buys perhaps to the 89/200ma's.

Only once price break down below the 21ema and pullback should you consider looking for shorts again (as per the rules to this methodology).

This is designed so people only take the high probability trades. It is letting the price tell you what it is doing and then you can act on it.

Experienced traders could take sells even above the 21ema however an inexperienced trader may struggle with those trades. By waiting for price to break the 21ema and pullback, traders are ensuring higher success rates.

  • #29,348
  • May 9, 2016 1:03pm May 9, 2016 1:03pm
Quoting JonnyPip
Hi Gabryus, Good job, they studying of the methodology will pay off Sticking to the 4h and 1h time frame is going to get the best results, I sometimes go down to a 15m, rarely a 5m just to get a deeper analysis, but ultimately the 4h and 1h are of higher importance. I also check the daily and weekly to get an overal picture, perhaps the monthly if necessary. The MACD is not as important as the market rhythm, it mainly helps to show divergence which tells you the move could be slowing down. It doesn't mean it is going to reverse, often...
Very nice comment.
Very important for new ones here and a good reminder to old ones. The foundation or basics behind a traders approach to trading is very important to his success in the trading career.
Phillip made it very clear that a lot has changed in the market over the years and based upon his explanation and as we all who has been following his system can see, traders depending on the MACD will definitely not catch up with many good opportunities... they guys that are focused on trading PURELY MARKET RHYTHM WILL ALWAYS BE HAPPY. I THANK GOD I DISCOVERED THAT ON TIME....I AM A MARKET RHYTHM TRADER BASED UPON THE CONCEPT OF PHILLIPS SYSTEM.
Thank you Jonny for your insight....I am done with the my computer, the formatting and updating, and little break that I took. I am up for trading as usual...

God bless
  • #29,349
  • May 9, 2016 1:06pm May 9, 2016 1:06pm
Quoting naustingfx
{quote} Very nice comment. Very important for new ones here and a good reminder to old ones. The foundation or basics behind a traders approach to trading is very important to his success in the trading career. Phillip made it very clear that a lot has changed in the market over the years and based upon his explanation and as we all who has been following his system can see, traders depending on the MACD will definitely not catch up with many good opportunities... they guys that are focused on trading PURELY MARKET RHYTHM WILL ALWAYS BE HAPPY. I...
Hey Nausting

Thanks - Glad to hear you are back. I always enjoy looking at your charts you post.

  • #29,350
  • May 10, 2016 2:06am May 10, 2016 2:06am
Quoting Gabryus
{quote} Not clear how you determine 77.50 level, right now price on E21 (79.3) and 89 at around 82.948 how you can determine what should be move now? If breakking up then again to price and touching 89 (probably) if not? and especially when? PS I try to ask to you but, of course if too questions and too idiot easily let me know!
As you can see, price is now above the 21ema and has also closed above the 21ema in 4h telling us there is now strength in the Aud so looking for sell now could be risky. Even though we anticipated lower moves initially, the price is now telling us to think again.

Is this a surprise? Not really because we had divergence so it now makes sense for this to be happening.

Now we can be potentially anticipate a move higher to around the 89sma. However it doesn't necessarily mean we will get one. (Don't forget a move to 89sma is still counter trend on a higher time frame.)

Until it breaks below the 21ema and pulls back again, you can consider sells to now be more risky.

Hopefully this shows how the market and the MA's tell you what could be happening next and how you must be prepared to change your bias when the market changes. If you try and tell the market what to do, you will suffer.

Hope this helps Gabryus
  • #29,351
  • May 10, 2016 2:07am May 10, 2016 2:07am
Chart for above post
Attached Image (click to enlarge)
Click to Enlarge Name: AudJpy 4h 10.5.16.jpg Size: 216 KB
  • #29,352
  • May 10, 2016 3:56am May 10, 2016 3:56am
Quoting JonnyPip
Hey Mobber Just checked it out looks ok however you might find it is a slow burner because the Aud is weak across the board and so is the Cad. Its when you get an imbalance in the strength of the currencies you see nice moves, when they are equally weak or strong they tend to bounce around a lot. Plus you have the 0.9400 level in between to watch out for. All it means is it usually requires a bit of patience Here is one on the UsdCad I am in, there is a good chance it could pullback to give another chance of entry before any higher moves....
Luckily got out of the AUDCAD at breakeven, both AUD & CAD showing good strength this morning.
  • #29,353
  • May 10, 2016 4:26am May 10, 2016 4:26am
Potential setup on the GBPAUD. What's your thoughts JonnyPip?
Attached Image (click to enlarge)
Click to Enlarge Name: 2016-05-10_11-14-13.png Size: 32 KB
  • #29,354
  • May 10, 2016 4:43am May 10, 2016 4:43am
Quoting Mobber444
Potential setup on the GBPAUD. What's your thoughts JonnyPip? {image}
Hey Mobber,

Yeah I closed my 2 Aud trades this morning for around break even as well as I could see what was coming. I reversed one of them as well which is doing quite nicely. But now we are trading counter trend so we must be extra vigilant and not get tunnel vision, remembering that counter trend moves are followed by those in the direction of the trend i.e where our stops are!

Regarding the GbpAud I think there is definitely potential up to the 1.98 from here however the divergence shows us it could struggle a little bit and as we said the Aud is showing strength this morning, so for those reasons I will not take it. Where the Aud not showing strength I would probably take the odds on for at least 1.98.

I am in other trades which are GBP long so I generally don't like trading pairs which are strong v strong or weak v weak. Yes it could be the case the GBP is stronger than the Aud (I think it probably is), and therefore still move higher. However the move is often fairly slow or choppy when pairs have fairly even strength/weakness.

I'm not saying do or don't take it, that is not my place to say something like that. I am just saying how I trade and what I know from my personal experience.

  • #29,355
  • May 10, 2016 5:05am May 10, 2016 5:05am
For example:

Im my opinion why risk money trading against a strong AUD, when you can just simply wait for a currency such as this -

This is from the chart I posted yesterday, it moved this morning and this is what happens when you get a strong currency and a weak currency. See the difference in the move?

Catching these moves is what will let you hammer hundreds and even thousands of pips in a week. If you look at the week of trades I put up, you can see the final total was something over 1000 pips for the week and these trades I put up before/as they happened. The point of that was simply to answer the question of - "Does this methodology still work or not?" The answer is it works even better now than when the thread was created because the markets are more volatile.

You can see at the beginning of the thread Phillip says the markets have changed so now sometimes bigger stops are required. This is true, because bigger moves happen (more volatility). But equally this also means bigger profits when done correctly, the markets are always a double edged sword.

Hope this makes sense?

Attached Image (click to enlarge)
Click to Enlarge Name: GbpChf 1h set up 10.05.16.jpg Size: 218 KB
  • #29,356
  • May 10, 2016 5:12am May 10, 2016 5:12am
Quoting JonnyPip
{quote} Hey Mobber, Yeah I closed my 2 Aud trades this morning for around break even as well as I could see what was coming. I reversed one of them as well which is doing quite nicely. But now we are trading counter trend so we must be extra vigilant and not get tunnel vision, remembering that counter trend moves are followed by those in the direction of the trend i.e where our stops are! Regarding the GbpAud I think there is definitely potential up to the 1.98 from here however the divergence shows us it could struggle a little bit and as we said...
Thanks for the great advice, I am still an absolute beginner using this method of trading so any advice is much appreciated! Makes sense to pick out only the strong vs weak trades and only take these high probability trades. I am long GBPJPY on another method I trade, doing nicely, up 100pips. Do you trade divergence or only use it as a guideline to measure the trend strenght/weakness?
  • #29,357
  • May 10, 2016 5:46am May 10, 2016 5:46am
No problem I am happy to help

Everyone starts as an absolute beginner remember.

Nice trade, I am also in the GbpJpy long, up currently around 120 pips. Entry was from a break 21ema, pullback, move to 89sma.

So you can see, even another method such as you mention is moving to the market rhythm. This is why I say there is only 2 ways of trading, the right way and the wrong way. People may misunderstand that as me saying "there is only one system that work and it is this one". What that means is, people spend a huge amount of time going through multiple systems and they are just being shown the wrong way of trading many different ways. Now yes, there will be other "systems" or "methods" and they will be successful. But ultimately when you look at it they will just be showing you a different way of looking at the market rhythm. This is why Philip even says, once you understand the market rhythm you can even use it with other "systems". If you truly understand the market rhythm it isn't necessary to add anything else, but you can if desired.

I will never take a trade just on divergence is the market rhythm/price doesn't back it up. Mainly I will use it to see if price could be correcting or slowing down. Trading divergence signals in a strong market will result in big losses, it is a bad idea in my opinion.

Attached Image (click to enlarge)
Click to Enlarge Name: GbpJpy 4h 10.5.16.jpg Size: 243 KB
  • #29,358
  • May 10, 2016 8:45am May 10, 2016 8:45am
Quoting JonnyPip
Hey no problem Gabryus Happy to help The more you do it and look at the charts the more the rhythm will jump right out. Not only that you will also be able to see what rhythm is strong, as well as looking at the ones which are weaker set ups and learning to ignore them. If you have to stare at the chart for 30 minutes just to try and work out the rhythm, it probably isn't worth trading or is ranging and bouncing around. This is very important as not all signals should be traded. The reason traders struggle with this is usually, as I have said...
Fantastic words and full of sense.
Thanks, hope to be able one day to reach meaning of trend and rhythm. Working hard for this, time and effort is required. And also not so many hours of sleep
!
  • #29,359
  • May 10, 2016 8:55am May 10, 2016 8:55am
Hi I am new to this system and I think after reading several pages of this forum I want to use this system but the problem that I am having is I can't seem to find all of those files on the first page of the forum that is being recommended. Is there a way to search for the post number instead of having to click on every page individual until I get there? Also I have a question for JonnyPip. what is the average stop loss size for these positions that you use?
  • #29,360
  • May 10, 2016 11:25am May 10, 2016 11:25am
CADJPY going to touch 365?
Have a look, how you read state there?
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