Right. Let's look at that I've included there. It's about... I call it rhythm trading. Page 1, that triangle. We had three TC signals (well, number 3 was actually a zero break. Number 2 was a TC, which was a wrong deal, one of the very few where the MACD TC is wrong. Luckily, it was in the early morning. I was sleeping. I was on leave during that time, so I missed that trade. But, sometimes, sleep can keep you out of a bad trade as well. Number 1 was a beauty, but look what happens. Price was in a triangle, and then, all of a sudden, it broke out to the top above the 89, and then it pulled back towards the trend line. Actually, it went just a little bit through the 89. Then, it started moving back upwards at that capital A, that red A that I've got there. Now the MACD is only giving the signal on that huge candle, and a lot of people were waiting for that candle to close, because they were waiting for the MACD to give the signal. But it was all part of the market rhythm trading as we discussed on the thread itself. When the price breaks out, it tends to pull back to the breakout level and, then, carries on. That's exactly what happens there. After those three small candles there, I would have entered right on the 21 ema. I wouldn't even think twice, stop loss just below the trend line, and that's it. Target, the 200 sma. Remember, after a breakout, look for the pullback and then the carry on.
Right. Page number 2. Small triangle there. Look what happens there. Because the triangle is small, it gets support and resistance, bottom and top. There are a lot of tails inside the triangle. But, then, that nice little shooting star, that tail going out of the triangle to the top, and then it starts falling. I wouldn't even think twice. After the close of that candle, take the odds on for going down, stop loss just above the trend line or just above the body of that candle with a minimum of, I would say, about 25 pips. I wouldn't make the stop loss below 23, I would say. But beautiful indication there of what the market wants to do.
Page number 3. Look at that triangle. Look at the green lines, market rhythm. The price came from a to x, and then back to b, and then it came down to 1, below the 21 ema, that arrow just to the left-hand side, that's the 21 ema. The price went back up above the 21 ema, touching that top trend line, the a, b, 2 trend line, and then starts coming down all the way. And that's part of the rules at the end of an up move. You'll get that the price makes lower highs (a, b, and number 2 is lower highs; x and number 1 are lower lows) indicating that the price is going to come down. So, where do I enter? The MACD is giving just a zero break there. Beautiful signal. You take it; you come down to z for your profit target.
Page number 4. Look at that triangle. The price is caught between the 200 sma and the 89 sma. Look towards the end of the triangle. It gets bumpy because the price knows there's a lot of emotion that's got to build in there, that is building there, and the price needs direction. Now, it's going up and down. But look at those three circles there, getting support [resistance?] on the 89, the first two on that top trend line, and the third one did not go (I covered it a little bit with that green line), did not go to that trend line, just above the 89 sma. Remember that your last touch is the one that carries the most
weight, especially towards the end of the triangle. That's why I would look for a down move here. Look what happened. The price broke out. Then it pulled back towards the breakout level. It did not go to the trend line but to the 200 sma and the 21 and the 8 ema that was there. Then, it started moving down. People did not take that trade because of that huge signal candle on the MACD, but, that horizontal line, that h one, that's where I would have gotten involved because the rhythm trading was in place. The price did pull back to the 200. It starts moving down, and, when it gets to that horizontal line, I know the odds are in my favor that the rhythm trading is in place. It was a breakout level. There was a pullback and a continuation, and that's when I will switch to the one hour to get a nice entry place, and it is a nice stop loss. Look at the one hour, how it looks at that specific point, and then you enter the market there.
Right. Page 5. There's another triangle. Look towards the end. You can see candles getting up and downs, and then, on the MACD, there were three green TC signals towards the end. Now, that's what I'm trying to tell you people, to be careful within a triangle to watch its end. You might get some TC signals given, very slight. If you'll look at the difference between the MACD bars, you will find that it's hardly a TC given there. But, in this case, it would have worked out if you took it and put the stop loss just below that candle. On number a, number b, and number c, you would have been right, but what I wanted to show you here is that the price actually broke out. And, at that horizontal line, h, that's where I would have started looking to get involved if there was a pullback on the one hour. And, if you look at the inset, it just broke out and just went on. There was no safe chance to get in there, because remember, in that one hour, the price can move up and down 30 pips, 40 pips, and even take out your stop loss. So, I won't recommend going to a lower time frame. I have done thirty minutes to see whether the thirty minutes has given sort of a pull back and a nice move away to get in. I won't recommend that. You can do it if you've got experience on it, but this was no safe chance, what I would call it. There was no real safe chance where you could say, "Right, I can get into this trade safely, and I can let it run. So, that was a missed chance, and you're going to get those.
Right. What I want to say is that the MACD is there for confirmation. You cannot trade off the MACD solely. If you just trade TC’s, yes, but then you’re going to miss some huge candle trades because, normally, when the TC is there, what I’ve seen lately is the move, when it starts moving, the candles are big because there’s a lot of uncertainty of direction. That’s why the candles are big. You’ll get a slow down and then a big candle moving away, and that’s when the MACD is giving a TC. So, now we have to use market rhythm trading. You’ve got to know the market rhythm trading to really get involved. Like the trade I did on Friday, it’s to really analyze the whole situation to see for yourself what type of emotion is building up there. And what are the chances that it is going to do this or that? Then wait for confirmation in your candles, like a morning star, an engulfing candle, a hammer, or a shooting star, and, if the MACD is confirming that, then you’re lucky. You take it. But, sometimes that candle is big and it’s fast, moving away, but, when it starts moving and you’ve analyzed it and are satisfied that it is within the rhythm trading of the market, you can switch to the one hour and get a better entry there.
So, it’s not just rhythm trading the one hour. It’s looking on the four hour, analyzing it. Get the rhythm trading correct. Get the candle emotion correct, and then switch to the one hour, when it starts doing the thing that you have analyzed that it might do. And, then, get in on a better price on the one hour. I hope this has helped you.
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Right. Page number 2. Small triangle there. Look what happens there. Because the triangle is small, it gets support and resistance, bottom and top. There are a lot of tails inside the triangle. But, then, that nice little shooting star, that tail going out of the triangle to the top, and then it starts falling. I wouldn't even think twice. After the close of that candle, take the odds on for going down, stop loss just above the trend line or just above the body of that candle with a minimum of, I would say, about 25 pips. I wouldn't make the stop loss below 23, I would say. But beautiful indication there of what the market wants to do.
Page number 3. Look at that triangle. Look at the green lines, market rhythm. The price came from a to x, and then back to b, and then it came down to 1, below the 21 ema, that arrow just to the left-hand side, that's the 21 ema. The price went back up above the 21 ema, touching that top trend line, the a, b, 2 trend line, and then starts coming down all the way. And that's part of the rules at the end of an up move. You'll get that the price makes lower highs (a, b, and number 2 is lower highs; x and number 1 are lower lows) indicating that the price is going to come down. So, where do I enter? The MACD is giving just a zero break there. Beautiful signal. You take it; you come down to z for your profit target.
Page number 4. Look at that triangle. The price is caught between the 200 sma and the 89 sma. Look towards the end of the triangle. It gets bumpy because the price knows there's a lot of emotion that's got to build in there, that is building there, and the price needs direction. Now, it's going up and down. But look at those three circles there, getting support [resistance?] on the 89, the first two on that top trend line, and the third one did not go (I covered it a little bit with that green line), did not go to that trend line, just above the 89 sma. Remember that your last touch is the one that carries the most
weight, especially towards the end of the triangle. That's why I would look for a down move here. Look what happened. The price broke out. Then it pulled back towards the breakout level. It did not go to the trend line but to the 200 sma and the 21 and the 8 ema that was there. Then, it started moving down. People did not take that trade because of that huge signal candle on the MACD, but, that horizontal line, that h one, that's where I would have gotten involved because the rhythm trading was in place. The price did pull back to the 200. It starts moving down, and, when it gets to that horizontal line, I know the odds are in my favor that the rhythm trading is in place. It was a breakout level. There was a pullback and a continuation, and that's when I will switch to the one hour to get a nice entry place, and it is a nice stop loss. Look at the one hour, how it looks at that specific point, and then you enter the market there.
Right. Page 5. There's another triangle. Look towards the end. You can see candles getting up and downs, and then, on the MACD, there were three green TC signals towards the end. Now, that's what I'm trying to tell you people, to be careful within a triangle to watch its end. You might get some TC signals given, very slight. If you'll look at the difference between the MACD bars, you will find that it's hardly a TC given there. But, in this case, it would have worked out if you took it and put the stop loss just below that candle. On number a, number b, and number c, you would have been right, but what I wanted to show you here is that the price actually broke out. And, at that horizontal line, h, that's where I would have started looking to get involved if there was a pullback on the one hour. And, if you look at the inset, it just broke out and just went on. There was no safe chance to get in there, because remember, in that one hour, the price can move up and down 30 pips, 40 pips, and even take out your stop loss. So, I won't recommend going to a lower time frame. I have done thirty minutes to see whether the thirty minutes has given sort of a pull back and a nice move away to get in. I won't recommend that. You can do it if you've got experience on it, but this was no safe chance, what I would call it. There was no real safe chance where you could say, "Right, I can get into this trade safely, and I can let it run. So, that was a missed chance, and you're going to get those.
Right. What I want to say is that the MACD is there for confirmation. You cannot trade off the MACD solely. If you just trade TC’s, yes, but then you’re going to miss some huge candle trades because, normally, when the TC is there, what I’ve seen lately is the move, when it starts moving, the candles are big because there’s a lot of uncertainty of direction. That’s why the candles are big. You’ll get a slow down and then a big candle moving away, and that’s when the MACD is giving a TC. So, now we have to use market rhythm trading. You’ve got to know the market rhythm trading to really get involved. Like the trade I did on Friday, it’s to really analyze the whole situation to see for yourself what type of emotion is building up there. And what are the chances that it is going to do this or that? Then wait for confirmation in your candles, like a morning star, an engulfing candle, a hammer, or a shooting star, and, if the MACD is confirming that, then you’re lucky. You take it. But, sometimes that candle is big and it’s fast, moving away, but, when it starts moving and you’ve analyzed it and are satisfied that it is within the rhythm trading of the market, you can switch to the one hour and get a better entry there.
So, it’s not just rhythm trading the one hour. It’s looking on the four hour, analyzing it. Get the rhythm trading correct. Get the candle emotion correct, and then switch to the one hour, when it starts doing the thing that you have analyzed that it might do. And, then, get in on a better price on the one hour. I hope this has helped you.
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