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4 Hour Strategy (MACD)

  • #29,561
  • Aug 8, 2016 4:20am Aug 8, 2016 4:20am
Quoting JonnyPip
{quote} Here's what I see CB, On the 1h chart it is telling me it could be a "messy" break 21ema, move to 200sma. The reason I say "messy" is because it is currently above the 21ema/89sma indicating a buy, but sometimes it can just be a "messy" break 21ema, pullback (above), move to 200sma. I would either wait for it to break above the trend line looking higher, or see if we get another break of the 21ema downwards on the 1h chart, looking for the pullback, move to 200sma trade. 1.2800 in AudUsd in definitely on the cards in my opinion, barring...
I see what you mean, I've gone back and looked at the chart one more time and the possibility of 200SMA as TP is also on the table. Let's see how it plays out. Besides its only Monday.

As for the AUDUSD reaching 1.2800, I've made an analysis (following the same rules stated in the Market Rhythm) and if I follow through on that trade, my exit would be a conservative 1.2500 (128% fib extension). My nerves would get the better of me beyond that, instead I'd look for multiple short term profits headed towards the 1.2800. Hope i making sense.

Thanks for the heads up Jonny
  • #29,562
  • Aug 8, 2016 4:35am Aug 8, 2016 4:35am
Quoting JonnyPip
{quote} Something to watch on CADCHF for me is that it is below the 89sma telling us the general "mood" is down. Added to the USDCAD trade which I am looking at (suggesting CAD weakness) I would be cautious about taking a long position here. I am not saying it wont happen, I am just saying that personally due these reason I would filter this trade out.
I was apprehensive analysing the CADCHF, given that, on the 4hr chart, the 89 is above the price and so close to the 21. The market rhythm setup is what prompted my decision. But i needed to make this mistake to learn from it. I've gone through it again baring in mind the knowledge you've shared with me now and I've noticed i had overlooked the weakness of the currency. I'll incorporate in my next trades.

Once again, invaluable information

Thanks a million Jonny
  • #29,563
  • Aug 8, 2016 4:51am Aug 8, 2016 4:51am
Quoting Cheeseburger
{quote} I was apprehensive analysing the CADCHF, given that, on the 4hr chart, the 89 is above the price and so close to the 21. The market rhythm setup is what prompted my decision. But i needed to make this mistake to learn from it. I've gone through it again baring in mind the knowledge you've shared with me now and I've noticed i had overlooked the weakness of the currency. I'll incorporate in my next trades. Once again, invaluable information Thanks a million Jonny
No problem CB

I don't claim to be able to see the future, it may well go higher.

But just sharing my own process and how I decide which trades to take.

Trading is about sticking to your rules. If you know they work and you stick to them, you don't mind if you miss a trade because you did the right thing. If you know they work, you stick to them and the trade losses, you don't mind as you did nothing wrong. Only when you start bending your rules and not sticking to them are you doing something "wrong".

Lets see how everything plays out anyway, it could be a good week
  • #29,564
  • Aug 8, 2016 5:12am Aug 8, 2016 5:12am
Quoting JonnyPip
{quote} No problem CB I don't claim to be able to see the future, it may well go higher. But just sharing my own process and how I decide which trades to take. Trading is about sticking to your rules. If you know they work and you stick to them, you don't mind if you miss a trade because you did the right thing. If you know they work, you stick to them and the trade losses, you don't mind as you did nothing wrong. Only when you start bending your rules and not sticking to them are you doing something "wrong". Lets see how everything plays out...
Hear, hear JP
  • #29,565
  • Aug 8, 2016 10:02am Aug 8, 2016 10:02am
Quoting guiyee
Hello everyone, this is my first time testing this.. So i am just wondering if I am seeing things right on USDJPY Target would be 102.72? {image}
Had my first winner with the strategy.

USDJPY +80
Opened at 101.840 .. Target was 102.620.. took a 1:2 R/R.. thats a 4% of the account.

Anyone else took it? Or it wasn't a good setup?
  • #29,566
  • Aug 8, 2016 10:19am Aug 8, 2016 10:19am
Quoting guiyee
{quote} Had my first winner with the strategy. USDJPY +80 Opened at 101.840 .. Target was 102.620.. took a 1:2 R/R.. thats a 4% of the account. Anyone else took it? Or it wasn't a good setup?
Hey guiyee,

I didn't take that trade as it looks like you opened it whilst it was night time where I am, sounds like a good trade though. Are you able to post a chart of it showing the market rhythm/ thought process? That would help to see what the trade was

JP
  • #29,567
  • Edited 11:02am Aug 8, 2016 10:51am | Edited 11:02am
Quoting JonnyPip
{quote} Hey guiyee, I didn't take that trade as it looks like you opened it whilst it was night time where I am, sounds like a good trade though. Are you able to post a chart of it showing the market rhythm/ thought process? That would help to see what the trade was JP
Yes here it is.

What do you think Jonny?

I took it since price reached that bottom price again with signs of weakness supported by divergence on MACD. Lower low and broke the last swing high making a higher high, and opened with a Gap.. so I thought it would be a nice shot. Also, it broke 00 number..
Now i think it could go back to 00 and have a chance with TC pattern to go long to the 89 SMA


Attached Image (click to enlarge)
Click to Enlarge Name: USDJPY 08-08.png Size: 183 KB


I was going to take AUDUSD too for that TC pattern, but i forgot about it. lol
  • #29,568
  • Aug 8, 2016 11:16am Aug 8, 2016 11:16am
EURaud

Anyone watching this pair? A possible Higher Low macd in the making

Attached Image (click to enlarge)
Click to Enlarge Name: EURaudH4.png Size: 60 KB
  • #29,569
  • Aug 8, 2016 11:19am Aug 8, 2016 11:19am
Quoting guiyee
{quote} Yes here it is. What do you think Jonny? I took it since price reached that bottom price again with signs of weakness supported by divergence on MACD. Lower low and broke the last swing high making a higher high, and opened with a Gap.. so I thought it would be a nice shot. Also, it broke 00 number.. Now i think it could go back to 00 and have a chance with TC pattern to go long to the 89 SMA {image} I was going to take AUDUSD too for that TC pattern, but i forgot about it. lol
Hey guiyiee,

By the way I didn't mean post your account, just the charts to see the market rhythm.

In my opinion that is a great trade

In the 1h it is a break 21ema and 89sma, pullback, move to 200 sma.

That is a trade I would take/ would have taken if it were during my trading day

Great job!
  • #29,570
  • Aug 8, 2016 11:27am Aug 8, 2016 11:27am
Quoting orangeRANGE
EURaud Anyone watching this pair? A possible Higher Low macd in the making {image}
Hey Orange,

Yep I saw this as well. Impossible for me to trade long at the moment as it is still going down and it could easily turn into a lower low.

I'm thinking maybe wait for a move up/break of 21ema and a pullback, before a possible move to 89 if it happens.

What do you think?

JP
  • #29,571
  • Aug 8, 2016 11:45am Aug 8, 2016 11:45am
Quoting JonnyPip
{quote} Hey Orange, Yep I saw this as well. Impossible for me to trade long at the moment as it is still going down and it could easily turn into a lower low. I'm thinking maybe wait for a move up/break of 21ema and a pullback, before a possible move to 89 if it happens. What do you think? JP
Need to wait macd to complete the pattern. I think the price might go into ranging zone (which is boring) again before continue / reverse trend.

Weekly 200sma is the support now.
  • #29,572
  • Aug 8, 2016 11:45am Aug 8, 2016 11:45am
Quoting JonnyPip
{quote} Hey guiyiee, By the way I didn't mean post your account, just the charts to see the market rhythm. In my opinion that is a great trade In the 1h it is a break 21ema and 89sma, pullback, move to 200 sma. That is a trade I would take/ would have taken if it were during my trading day Great job!
Oh it's fine, that one it's just the Demo account hehe

Thanks for the feedback! And thanks for the advice!! Its good to know I took a good trade and its even better to know how to enhance my entry next time..
So checking and understanding 1H is a good part of this strategy for the entry right?
  • #29,573
  • Aug 8, 2016 12:11pm Aug 8, 2016 12:11pm
Quoting orangeRANGE
{quote} Need to wait macd to complete the pattern. I think the price might go into ranging zone (which is boring) again before continue / reverse trend. Weekly 200sma is the support now.
Hey Orange,

Yeah it's hard to say right now isn't it.

I am anticipating something like the chart below in 1h chart

We'll have to see how it plays out and trade accordingly anyway, otherwise we can only guess.

JP
Attached Image (click to enlarge)
Click to Enlarge Name: EurAud 1h 8.8.16.jpg Size: 209 KB
  • #29,574
  • Aug 8, 2016 12:12pm Aug 8, 2016 12:12pm
Quoting guiyee
{quote} Oh it's fine, that one it's just the Demo account hehe Thanks for the feedback! And thanks for the advice!! Its good to know I took a good trade and its even better to know how to enhance my entry next time.. So checking and understanding 1H is a good part of this strategy for the entry right?
Yes checking the 1h time frame is a very good way to enhance your entry, same 4h rules apply on the 1h chart.

Good work

JP
  • #29,575
  • Aug 8, 2016 12:15pm Aug 8, 2016 12:15pm
What do you guys think about this one.

4 hr chart.
Crossed the EMA's
Retraced to the 21.
MACD went Red on last candle.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDH4.png Size: 48 KB
  • #29,576
  • Aug 8, 2016 12:38pm Aug 8, 2016 12:38pm
Quoting jcat
What do you guys think about this one. 4 hr chart. Crossed the EMA's Retraced to the 21. MACD went Red on last candle. {image}
Hi Jcat,

This is how I see the EurUsd.

Price is above the 89sma and below the 21ema so it is giving mixed signals from here.

Personally I would stay out of it until there is a break and pullback of the 21ema or the 89sma and I would aim for the round numbers highlighted.

Hope this helps
Attached Image (click to enlarge)
Click to Enlarge Name: Eurusd 4h 8.8.16.jpg Size: 224 KB
  • #29,577
  • Aug 8, 2016 12:58pm Aug 8, 2016 12:58pm
Quoting JonnyPip
{quote} Hi Jcat, This is how I see the EurUsd. Price is above the 89sma and below the 21ema so it is giving mixed signals from here. Personally I would stay out of it until there is a break and pullback of the 21ema or the 89sma and I would aim for the round numbers highlighted. Hope this helps {image}

That helps a lot. Glad you guys are here to give insight. It did pierce the 89, but pulled back above it and is stuck. Wait, wait, wait... Thanks
  • #29,578
  • Aug 8, 2016 4:24pm Aug 8, 2016 4:24pm
Quoting JonnyPip
{quote} Hi Jcat, This is how I see the EurUsd. Price is above the 89sma and below the 21ema so it is giving mixed signals from here. Personally I would stay out of it until there is a break and pullback of the 21ema or the 89sma and I would aim for the round numbers highlighted. Hope this helps {image}

Jonnypip,

I was wondering if you would mind sharing some thoughts on entry. I've noticed you said you trade "naked." Do you use candlestick patterns for entry? Maybe you have shared and I have missed it.... I do see you use the lower time frames to time it better.

thanks again.
  • #29,579
  • Aug 9, 2016 2:10am Aug 9, 2016 2:10am
EurAud Update

Here is the same chart I posted yesterday, EurAud seems to be doing roughly as anticipated, the question is whether we now get the final anticipated move higher or if if fails from here and turns down.

The overall 4h tend is down so any opportunity is technically a counter trend and therefore more risky in general. It could also turn at the 89sma.

Lets see how it plays out
Attached Image (click to enlarge)
Click to Enlarge Name: EurAud 1h 9.8.16.jpg Size: 212 KB
  • #29,580
  • Aug 9, 2016 2:45am Aug 9, 2016 2:45am
Quoting jcat
{quote} Jonnypip, I was wondering if you would mind sharing some thoughts on entry. I've noticed you said you trade "naked." Do you use candlestick patterns for entry? Maybe you have shared and I have missed it.... I do see you use the lower time frames to time it better. thanks again.
Hey jcat,

No problem, always remember that "doing nothing" in trading is making a choice to do something. Doing nothing doesn't mean you are not trading, you can be waiting 3 days for a trade and during that time you ARE trading because you are making the choice not to enter as you have looked at the charts at the opportunity hasn't presented itself. Inversely, opening the chart and clicking buy or sell without knowing why is not trading, yet it feels like trading because trades are being put on. Understanding this is always a bit of a revelation for new traders.

I do have a chart which I always look at first which has nothing on it to give me the clearest idea of what the market is doing. Candlesticks are essential to understand, especially for beginners, however I don't just trade from candlestick formations I also go down to smaller time frames to see what pattern or market movement has caused that candle to form. Often this will show me which candles will work and which ones to avoid. (Every candle is caused/formed by certain movements in price).

This is a skill though which builds up over time and I would definitely say trying to learn that before learning candlestick patterns themselves would be putting the cart before the horse and generally unhelpful for you.

What you have to remember with candle stick patterns and general price movement is it will tell you when and where it runs into support or resistance by the candle that forms. So if you understand them well, it will show you a strong support/resistance area without it even being on your chart.

Again, this is still something that takes time to learn as a skill. It's like studying books on how to build a shed for years and then attempting to build your first shed. You might know exactly how to build one but you still haven't practiced the execution. So although you know which pieces to put where, your first couple of sheds will likely be pretty useless as you start to acquire the skill and craftsmanship needed.

What can happen often is a new trader can, for example, read everything Phil Nel has put in this thread. They now know how to build the shed. They attempt to build it and after a few panels think "this isn't going very well, I better go and ask someone else's opinion on how to build a shed". The same thing happens and they spend their entire trading career searching for different ways to build a shed, without ever actually taking the time to learn the craftsmanship side of it.

It's like the meetings they have for people with addictions, they always famously say step 1 is accepting you have a problem, otherwise you can't fix it. Most traders never become successful because they refuse to believe it is their own ability which is lacking and needs training (NOBODY is born a good/successful trader), as oppose to the theory/system (book) etc.

I know this slightly extends beyond your question by the way Jcat, but it's really as well for any new traders coming to the thread. I believe this is so important for new traders to understand.

So my advice is definitely learn candlesticks. You don't have to set out to become a master of candlesticks, just simply picking some of the best ones and learning to see them on the charts without thinking is the best way forward. Having the discipline to only stick to those entries as well, after you have chosen them, is also very important. You will start to see that the market rhythm gives you the direction and the candles will then tell you when to go. I.e your bias and your trigger.

Hope this help
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