Market Rhythm 4 Hour Strategy
I.1 Beginning of the UP Trend Trading System
When the price goes through the 89SMA it trend trading system to pullback to the 21EMA, if the 21EMA is above the 89SMA. If not it trend trading system to pullback to the 89SMA or to the 8EMA. If there is any MA either the 8 or 21EMA that are above the 89SMA, the price will try to get back to them before moving away.
usd/ucf 4 hour breakout up trend trading system
If the price in a trend trading system comes only to the 8EMA, it means that the trend is very fast and price may bounce off the 8EMA continuing with the trend trading system without going to the 21EMA.
If you want to enter a trend trading system you do it when price comes to the 21EMA and moves away. Entry from the 21EMA in the trend trading system is a high probability trade, but should be confirmed by MACD and market emotion (morning star, bullish engulfing etc) and the risk reward ratio should be good.
When price is in a strong up trend trading system the 89SMA is above the 200SMA
I.2 Beginning of the DOWN Trend Trading System
When the price goes through the 89SMA it trend trading system to pullback to the 21EMA, if the 21EMA is below the 89SMA. If not it trend trading system to pullback to the 89SMA or to the 8EMA. So if there is any MA (8 or 21EMA) that are below the 89SMA, the price will try to get back to them before moving away.
If the price goes again above the 89SMA it means that the rhythm system will start over again so the price will pullback to the 21 EMA if it is below the 89SMA. If not it trend trading system to pullback to the 89SMA or the 8EMA.
If the price in a trend trading system comes only to the 8EMA, it means that the trend trading is very fast and price may bounce off the 8EMA continuing with the trend trading without going to the 21EMA.
If you want to enter a trend trading system you do it when price comes to the 21EMA and moves away. Entry from the 21EMA in the trend trading system is a high probability trade, but should be confirmed by MACD and market emotion (evening star, bearish engulfing etc) and the risk reward ratio should be good.
When price is in a strong down trend trading system the 89SMA is below the 200SMA
II.1End of the
UP Trend Trading System
When a trend trading is changed the price normally crosses the 21EMA and then tests it again before moving down to the next MA.
If in an uptrend trading system the price comes below the 21EMA it tend trading system to pullback to it and then moves down to the 89SMA. Sometimes the price after closing below the 21EMA won’t go back to it, but will go straight to the 89SMA.
If in an uptrend trading system the price comes below the 21EMA it pulls back to it closing above the 21EMA, and again it comes and closes below the 21EMA then it may move down to the 89SMA.
When an up trend trading system comes to an end the price is making lower highs and lower lows and the MACD sometimes shows divergence (meaning the price goes up while the MACD goes down).
The price may bounce off the 89SMA and go to the 21 EMA and the trend trading system may continue.
Or the price may go though or bounce off the 89SMA then go back to 21EMA and again back to the 89SMA. This can be start of consolidation or range period.
Entry on a trade should be made when the price is making a lower high after reaching a lower low, but the trade should be confirmed by MACD and market emotion (evening star, bearish engulfing etc) and the risk reward ratio should be good.
II.1 End of the DOWN Trend Trading System When a trend trading system is changed the price normally crosses the 21EMA and then tests it again before moving down to the next MA.
If in a downtrend trading system the price comes above the 21EMA it trend trading system to pullback to it and then move up to the 89SMA. Sometimes the price after closing above the 21EMA won’t go back to it, but will go straight to the 89SMA.
If in a downtrend trading system the price comes above the 21EMA it pulls back to it closing below the 21EMA, and again it comes and closes above the 21EMA then it may move up to the 89SMA.
When a down trend trading system comes to an end the price is making higher highs and higher lows and the MACD sometimes shows divergence (meaning the price goes down while the MACD goes up).
The price may bounce off the 89SMA and go to the 21 EMA and the trend may continue.
Or the price may go though or bounce off the 89SMA then go back to 21EMA and again back to the 89SMA. This can be start of consolidation or range period.
Entry on a trade trading should be made when the price is making a higher low after reaching a higher high, but the trade should be confirmed by MACD and market emotion system (morning star, bullish engulfing etc) and the risk reward ratio should be good.
III. Counter Trend trading System
When the price is trending it tend to pull back to the 21EMA before continuing the trend trading system. Sometimes it comes only to the 8EMA before continuing the trend trading system.
Look at the chart and work out the amount of pips gained or lossed in total over all the signals. Remember that countertrend trades trading system are to the 21EMA area only. Check the R:R ratio.
See where the trades are made with a trend trading system.You should only take counter trades trading when the price is away from the 8EMA in order to have space to take first profit at the 8EMA and the second one at the 21EMA.
You should take into consideration counter trades trading when there is important resistance or support (such as trendlines together with price level, Fibs etc), but the trade should be confirmed by MACD and market emotion (morning star, evening star, engulfing etc). You only take the trade if the risk reward ratio is higher than
1.If you do trades against the trend trading system they are risky ones and the gains sometimes are not too big.
IV. Range Trading System
In range period price oscillates between MA (89SMA and 21EMA or 89SMA and 200SMA).
If the price goes though the 89SMA it trend trading system to pullback to the 21EMA and then moves away. But if the price instead of moving away from the 89SMA goes back to it, then goes to the 21EMA then back to the 89 SMA and so on. It is the start of a range period.
It is very important to establish a channel for the price movement between resistance and support levels.
If you trading trade in this period you have to do it from the edges (from support to resistance level or from resistance to support level), but the trade trading should be confirmed by MACD and market emotion trading (morning star, evening star, engulfing etc) and the risk reward ratio should be good.
In range period you should always be aware of the breakout trading system, because it will come sooner or later and you don’t want to be on the wrong side.
V. Trend Trading System Breakout
You can enter a trade before the breakout trading system or after the breakout system.
It is very important to remember that the breakout trading system of a support, resistance or trendline is not a confirmation, but the pullback is so you should look at the price action for it.
Sometimes the breakout trading system may be false and the price will retrace and close below the breakout trading system level.
4 Hour MACD Forex Strategy
Welcome to the 4 Hour MACD Forex Strategy trend trading system. This strategy is aimed at simplicity as well as high probability trades. I have been in the equity market for almost ten years now and in the forex market for two years. I learned very early that forex trading is not for the shaky ones. One must have a tested and definite trading strategy system as well as well organized discipline to follow the strategy system and execute the plan as to the letter. One must be exact and precise. Therefore I paper traded for almost two years and read everything I could lay
my hands on. I bought books and courses. I attend a 5 day live web seminar. All this
did not help me at all as it did not fit my style of personality and I just did not seem to
connect with all this different strategies. Over two years of watching the graphs with
different indicators, moving averages etc. I started to get a feeling for the movement
and motion of the market especially the EurUsd around certain moving averages.
It wasn’t till late last year that I discover a setting with the MACD that gives
easy to read signals on a regular basis on a 4 hour timeframe trading system . I like the 4 hour
timeframe as one are not glued to the screen full time.
If you look at FIG 1 below you will see that there were 14 signals over a
period of 5 weeks. Within that period of FIG 1 the signals given were pretty good.
There are times when some signals does not produce positive results. I then had to
work on a filter system to only let me take the best ones. I found that the macd trading system
when moving in a certain way produces a 95% accuracy. I will show you later how the high probability trades look like. In FIG 1 the signals are shown and FIG 2 shows that an entry is made after the 4 hour bar has closed and at the opening of the next bar. In FIG 3 another 19 deals were shown of which the last one was not finished yet so out of a total of 18 trades 5 were wrong and 13 were right. As it is a 4 hour strategy trading system it means sometimes setting the alarm clock to catch an entry in the early morning hours. What makes it nice is that one will know after the close of a 4 hour bar whether the next 4 hour bar might close as a signal by just following the macd trading system . Therefore one can set an alarm at that time. Have a look at FIG 1 to 3. Disclaimer: As trading in the Forex market is very risky, the reader if going beyond this point and applying the concepts and methods describing in this document do so on his or her own will and risk. The writer and or anyone involved in the compiling of this document will not be held responsible for any losses incurred by using the methods described in this document as no money management nor stoploss levels are discussed as it vary from forex trader to trader according to there own risk and capital
This was just to see and get a feeling for the graphs. Let us start to set-up our charts.
You will see later on when dealing with the different macd trading system signals that in the
examples used I did not marked every signal. There are signals not marked and the
reason being that the intention was to let you see the different type of signals and not
to indicate everyone.
THE MACD ON ITS OWN IS NOT ENOUGH OF A TRADING SYSTEM AND
OR INDICATOR TO BE SUCCESSFUL USING IT ON ITS OWN.
Therefore to understand the trading system as a whole you need to go to Lesson 2 --- Tsunami and study the 13 Lessons given. Study the Lessons on Market Rhythm by heart
as that is the heart of this trading system. It will let you filter the trades that can hurt you.
Moving Averages
First of all are the moving Averages that we are going to use.
1. 365 Exponential Moving Average (365EMA)
2. 200 Simple Moving Average (200SMA)
3. 89 Simple Moving Average (89SMA)
4. 21 Exponential Moving Average (21EMA)
5. 8 Exponential Moving Average (8EMA)
MACD:
MACD settings at
1. Fast EMA 10
2. Slow EMA 22
3. MACD EMA 1
Horizontal Lines:
Three sets of horizontal lines above and below zero should be drawn on the macd trading system
window at levels as well as one on zero
1. Level +0.0015
2. Level +0.0030
3. Level +0.0045
4. Level –0.0015
5. Level –0.0030
6. Level –0.0045
Your Graph should look like this: (Choose your own colour and styles)
The macd trading system moves in certain patterns that when recognized can be very profitable
Trades. Let me show you the very important ones first. By not following every signal
but only the ones that gives high probability trades through certain MACD patterns
serves as a filter. The ones not familiar are not taken. This is the filter.
Countertrend trading sysytem trades can be dangerous as it involves going against the trend. When
going countertrend trading system determine the resistance
This pattern comes very regular especially A and D as the macd sytem has moved beyond
the 0.0045 level and are due for a correction and or trend reversal. B and C are trend trading systemcontinuing patterns and are entered in the direction of the trend trading system Red circles indicates
entry signal and entry is made on the opening of the next bar.
Round tops and bottoms are for sure. Just
be careful when within the first zone
0.0000 to 0.0015 above or below the zero.
I like the rounding to be formed over at
least 5 bars.
move is coming as the price is within a range for almost 8 days. Lets see if that will happen.
Up to now I have only concentrated trading system to give the signal on the macd system window so that you will be able to recognize it. It is easy to see the formation after it has formed. It takes a bit of practice to recognize it while it is forming. Lets look at a couple just to see how they look when the trade is entered.
resistance of the price movement. Say we entered the trade at Entry above. Our first
profit target will be around our fast moving averages trading system (8EMA and 21EMA). Our
second profit target will be around the slow moving averages system(89SMA and365EMA).
Our third profit target will be at price level 1.2100 etc etc etc.
This is how you plan your trade in advance to take partial profits till you complete the
trade. Should there be a moving average trading system or price level nearby and below your entry
level you must take note that the price might go and test them. So your stoploss must
be aware of that.
Again I ask you to study the movement of the price around the moving averages.
When the price are above the 89SMA the trend system is normally up and visa versa. After
the price crosses the 89SMA it tends system to pullback to the 21EMA before it carry on its
direction if it is a trend direction change otherwise it tend to test the 89SMA again and
then it runs over and across the 89SMA till it finds direction and then it pulls back to
the 21EMA before proceeding on its path.
The macd trading system pulled back to the Zero line and then closes lower which indicate a down
move. “Got entry at 1.2955 and has set stoploss at breakeven at 1.2955 when
price did hit 1.2935. I am scared for a false breakout trading system below support
but now the price can turnaround as I have a free ride.”
“Hi
Amazing how it found support with Fibonacci trading system. I wanted to do
this trade with you as it developed so that you can see how I go
about. I just had a feeling that the price is not going to go down to
1.2900 straight away so I applied fibonacci trading system as there was no other
indicator between the entry price and 1.2900. One has to listen to
that little voice inside as well. I was stopped out on the other have
at 1.2935 so the total gain was 35 pips on 50% and 20 pips on the
other 50% for a total of 27.5 pips on full lot.
Not bad for an hour work.
Greetings”
This trade however was a bit risky as it was a breakout trade after ten days
consolidation testing a trendline system angling upwards. One has to evaluate the risk not
only in terms of pips but also in terms of strategy trading system and chart pattern system . After a breakout
the price very often turns back to test the breakout level and then that level becomes
either support or resistance in this case it becomes Eur resistance.
Stoploss have to be inside the breakout trading system other wise it can be triggered and then
sometimes it can be very big before entry signal is given by the macd system.
Here is what I normally do when the macd system shows a signal but the stoploss are to big
in relation to my capital or what I am comfortable with. I enter the trade in three
stages with my stoploss set at the same level.
You will notice that not all signals was taken. Sometimes I were already in a trade. I
did not actually trade all these trades live. This was done on a backtesting scenario. I stopped counting the pips for the April 2006 testing as it completely
convinced me of the success of this method. I randomly tested it using previous yearsand the results were amazing. Average of 300+ pips per month and then I only trade
the trades that gives signals at these times 17:00, 21:00 and 01:00 (GMT +2). It gives
between 8-10 deals per month using the mentioned timeframes.. (I use Metatrader and
data supply by MIG.). Due to working hours and the fact that that I don’t have
internet access during working hours I can only trade those hours.
If you use patterns in the macd trading system that occur regular that gives results and use
them every time they occur you will most definitely make money.
For newcomers I suggest that you trade only Trend Continuous signals as well
as RT and RB that occur above the 45Level Hor lines as that will give you a positive
start. Less pips but mostly successful trades.
I haven’t discuss nor used trendlines system so far in this document and when you add
them it will most definitely helps you in defining your exit levels. The entry level are
determine by the macd trading system but the exit or profit levels is determine by support and
resistance levels. I use the moving averages as described earlier as well as Fibonacci
levels and then most definitely trendlines and price levels. I normally take the daily
graph and draw the trendlines according to it and then go to the 4 hour graph. I make
them nice and thick so that I can see them. Then I draw the different price levels such
as 1.2900, 1.3000, 1.3100 etc. It is amazing to see how the price find support and or
resistance at these levels.
I hope that this document will help you on your way to financial independents.
YOU MUST STUDY THE MARKET RHYTHM LESSONS AS THAT WILL
PROVIDE YOU WITH THE RIGHT KNOWLEDGE.
Edited 2007/08/05
You also must read through the whole thread to obtain the right mindset. This is not a
easy 1+2+3=4 type of system as it takes the Market rhythm trading system into account and a study
of these rhythm are essential to survive.
I could not post it all at once due to size limitations and the fact that
everything was not documented when this document was placed. As the thread developed a lot of questions was asked and answered so it is of importance to go through the whole thread.
Don’t trade very MACD signal. Make sure it is in harmony with market rhythm trading system and Risk to reward Ratio is bigger than one (R:R>1). Trade only 2-3 pairs at a time. I
focus on EurUsd, GbpUsd and EurJpy(risky) and lately I added the UsdChf.
Planning A Trade Trading System
There is different ways in planning a trade but this is how I do it.A. This is the entry point determined by the macd system There is no mystery
about the entry. When the macd trading system satisfy the rules as outlined in the 4
Hour MACD strategy trading system document then enter.
B. This is our first area of partial profit taking. We have 3 barriers namely
the 8EMA, 21EMA and the price level of 1.2200 to overcome. Where
you set your partial profit taking is up to you. If you can watch it live you can always decide real time otherwise set it at what you feel
comfortable with. The order of importance is price level first, then
21EMA and the 8EMA.
C. Next is the 89SMA and the price level of 1.2100. Both very important
but the 89SMA normally halts or turn the price around. At this stage I will close everything except 20% of my position if there is still room to go.
D. Just above D we have a trendline that should see our full position
closed. It could go to the 200SMA and the blue zone but only when live
in front of the computer will I give it still a chance below the trendline.
This is how it worked out. It is easy afterwards but you must plan your
trade in advance. The entry is not a factor anymore therefore one canconcentrate in managing the trade.
completely ignored the 89SMA and went straight down to the trendline.
When the trendline was hit the macd trading system indicated a trade upwards with the
89SMA as first barrier and so on and so on and so on.
Three little Sisters
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4 comments:
today buy usd/chf 1.0725 stoploss 1.0670 target 1.0900
gbp/usd 12/04/2010-16/04/2010 targeted 1.5500-1.5700
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