4 Hour MACD Forex Strategy


4 Hour MACD Forex Strategy
4小时MACD 外汇策略


Welcome to the 4 Hour MACD Forex Strategy. 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 as well as well organized discipline to follow the strategy and execute the plan as to the letter. One must be exact and precise.
欢迎学习4小时MACD 外汇策略。这个策略是以简单和高概率交易为目标。我现在已经在投资市场待过差不多10年了,在外汇市场也已经有两年了。我很早就知道外汇交易不适合常常容 易动摇的人。我们必须油一个经得起测试及验证的交易策略及具有计划有纪律的按策略交易并执行本文上的计划。我们必须要严格与准确。
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.
因此,我进行了差不多两年的模拟交易并把自己能读的都读了,我才敢下手写这篇文章。我买了 书和教材。我参加了5天的网络在线研讨。因为它并不符合我个人的性格,而我未能将这些不同的策略联系起来,所以,所有的这些对我一点用都没有。我看了超过 两年的带有各种指标,移动平均线等的图表,才开始大致能通过移动平均线来感受到市场,特别是欧元/美元的运行及波动。
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. I like the 4 hour timeframe as one are not glued to the screen full time.
去年的不久前我发现macd的一项设置可以让我更好的有一个基础规则去解读h4图表上的信号。我喜欢单一的看h4周期上的图表而不用看完其他周期的图表。
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 when moving in a certain way produces a 95% accuracy. I will show you later how the high probability trades look like.
你可以从下面的FIG 1发现5周内出现14个信号,在FIG 1里给出的信号十分好。但有时候这些信号也会出现失灵。因此我得做一个过滤系统能够让我可以捕捉最好的信号。我发现MACD以一定方式运行的时候,它有95%的准确度。下面我将介绍这个高概率交易是怎样的。
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.
在FIG 1里展示了这些信号,FIG 2则说明在4H棒子形成后的第二个棒子开盘时介入。
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.
在FIG 3里是暂时了另外19笔交易,其中一笔交易未完成外,而18笔交易中得到一个5笔交易失败,13笔交易正确的结果。

As it is a 4 hour strategy 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. Therefore one can set an alarm at that time.
因为它是4H策略,这就意味着可以设定一个警钟来捕捉在早上的介入点。这个策略的好处在于我们可以知道一个4小时的棒子结束后可以通过macd来判断接下来的棒子是否可做为一个信号进场。因此,我们可以那个时候设定一个警钟。
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 trader to trader according to there own risk and capital profiles.
看一下FIG1,FIG2,FIG3
免责声明:
因为外汇市场风险十分大,如果没有完全理解这一点并应用这篇文章的观念和方法,风险自负。由于不同眼交易者的风险和资金现状各异,所以没有讨论资金管理和止损水平,因此作者及与编辑该文章有关的任何人对有应用该文章的方法导致的任何损失不负责任.

FIGURE 1


FIGURE 3

This was just to see and get a feeling for the graphs. Let us start to set-up our charts.
看看下面的图表并感受一下,让我们了解一下图表的设置。
Moving Averages:
移动平均线:
First of all are the moving Averages that we are going to use.
首先说我们将会用到的移动平均线。
1. 365 Exponential Moving Average (365EMA)
1.365指数移动平均线
2. 200 Simple Moving Average (200SMA)
200移动平均线
3. 89 Simple Moving Average (89SMA)
89移动平均线
4. 21 Exponential Moving Average (21EMA)
21指数移动平均线
5. 8 Exponential Moving Average (8EMA)
8指数移动平均线
MACD:
MACD settings at
MACD设置是:快EMA5.慢EMA13和MACD EMA 1
1. Fast EMA 5
2. Slow EMA 13
3. MACD EMA 1

Horizontal Lines: 水平线:
Three sets of horizontal lines above and below zero should be drawn on the MACD window at levels as well as one on zero
在MACD的窗口应该画出来3条水平线,一条在0下,一条在0上另一条在0轴上。

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)
你的图表应该像这样:(选择你自己的颜色和风格)



The MACD 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.
当MACD按照一定可靠的模式运行时会是很有机会盈利的交易。先让我告诉你重点。不要遵循每一个信号,只交易那些通过那些可靠的macd模式给出的概率高的交易信号,把这做为一个过滤器。信号不相似的信号不要。注意,这就是过滤器。


This pattern comes very regular especially A and D as the MACD has moved beyond the 0.0045 level and are due for a correction and or trend reversal. B and C are trend continuing patterns and are entered in the direction of the trend. Red circles indicates entry signal and entry is made on the opening of the next bar.
这个模式是很规则的,特别是A,D,而MACD0.0045以外的水平可以作为修正或者趋势反转。B,C倾向于模式的趋势延续及开始顺着趋势的方向进行。红圈即是进场信号,而进场需在第二根棒子的开盘。

The head and shoulder is another definite.
头肩形态是另一个明确的信号。



Double top and bottom does not need any introduction as it speaks in any timeframe.
双头和双底并不需要任何介绍因为它在任何周期都存在。

When the MACD comes down towards the Zero line and turn back up just above the Zero line it is normally a trend continuing and should be taken and are normally a strong move.
当MACD向0轴方向走并且在到达0轴前继续向上走,这通常是趋势的延续,这样的信号我们要把握住,也通常也是强势的运动。


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.
圆顶及圆底无须置疑。只是要留意第一个区域的0.0000-0.0015是在0轴之上还是之下。我喜欢这个圆至少有5根棒子形成。

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 0


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this was a difficult month (Jan 2007)up to now but already 190 Pips up and a great move is coming as the price is within a range for almost 8 days. Lets see if that will happen.
07年2月是至今为止困难的一个月,但是也已经有190点上涨而因为盘整了差不多8天,大行情也将出现。让我们看看这种情况是否会发生。

Up to now I have only concentrated to give the signal on the MACD 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.
至今为止,为了能够让你识别出信号,我只集中给出MACD窗口的这些信号。如果它形成了,你就很容易看到它的形成过程。我们需要一些练习来识别这些信号的形成。我们看几个例子它在怎样的情况下我们可以进行交易。





Let us look at the graph above. See how price levels play a roll in the support and resistance of the price movement. Say we entered the trade at Entry above. Our first profit target will be around our fast moving averages (8EMA and 21EMA). Our second profit target will be around the slow moving averages(89SMA and365EMA). Our third profit target will be at price level 1.2100 etc etc etc.
看上面的图表,看价格水平在价格运动中支撑阻力位的是怎样起作用的。如上,我们按进场信号交易,我们第一盈利目标将在快移动平均线(8,12)附近。第二盈利目标在
慢移动平均线(89,365)附近。第三盈利目标将会在1.2100水平等等。
This is how you plan your trade in advance to take partial profits till you complete the trade. Should there be a moving average 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.
这就是如何计划你的交易,从进一步获取部分利润直至你完成这笔交易。那里应该有一根均线或者价格水平附近,或者在你的进场价下方是否有一个可能将被到达或测试的位置你必须留意呢?所以,你的做止损的时候必须理解这些。
Again I ask you to study the movement of the price around the moving averages. When the price are above the 89SMA the trend is normally up and visa versa. After the price crosses the 89SMA it tends 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.
我再次让你研究在移动平均线附近的价格运动,当价格在89SMA以上时,趋势是通常
上涨的,相反在89SMA以下时价格通常会下跌。在价格和89SMA 交叉之后,它通常会回撤到21sma之后才继续它的原来的方向。如果趋势改变的话,它就会去再度试探89SMA并且突破89SMA直到确认方向,然后在轨道运行之前再次回撤21EMA。



Here are a live trade I did for someone in explaining how I trade. This is actual e-mails that I did send. 25 January 2007 21:00 (GMT+2)
下面是解释我怎样为某人做的一笔实况交易。这是我确实的发出去的e-mail。25 January 2007 21:00 (GMT+2)
Hi
I took it with 30 pip stoploss and hope I can add to the Gbp one earlier this week. Greetings
我做了30点止损,希望我可以在这周早点的增加gbp。祝贺.




The MACD pulled back to the Zero line and then closes lower which indicate a down move.
MACD拉回到0轴线然后收盘更低,这暗示一波下跌
“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 below support but now the price can turnaround as I have a free ride.”
在1.2955进场,当价格触击1.2935时,把止损设置在平衡点1.2955。我担心下支撑的假突破,但是现在价格正向我想的那样轻松的反转了。



“Took 50% profit at 1.2920 and set other half stoploss at 1.2935”
在1.2920平半仓,并且在1.2935设另外半仓的止损。

“Hi
Amazing how it found support with Fibonacci. 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 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.

你会惊讶斐波纳契数列 如何提供支撑的。我想在行情继续发展时进行这个交易以便让你明白我如何操作的。我只是感觉价格不会直线下跌到1.2900,所以我用斐波纳契数测量进场价 至1。2900而不必使用其他指标。这也可以从里面知晓一些很细微的变化。我在1.2935出掉其他仓位,因此总的收益是一半是35点一半是20点,总盈 利是27.5点。
这小时的操作还是不赖的。

This trade however was a bit risky as it was a breakout trade after ten days consolidation testing a trendline angling upwards. One has to evaluate the risk not only in terms of pips but also in terms of strategy and chart pattern. 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.
这个交易无论怎么说还是有点风险的,因为它突破之后经过十天的巩固测试趋势线之后盘升。要衡量风险,不但表现在可盈利的点数,还表现在对策略及蜡烛形态把握。突破后,价格往往要回测突破位置并且该位置可以是支撑也可以是阻力,既然这样,那么它就是eur的阻力。

Stoploss have to be inside the breakout otherwise it can be triggered and then sometimes it can be very big before entry signal is given by the MACD.
止损点必须在突破价格以内,否则在MACD给出进入信号之前,它会触发,有时止损也要设置得非常大.


Here is what I normally do when the MACD 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.
这是当macd给出信号而相对我的资金,所做的止损十分大时我通常的做法或我满意的做法。我分3步进场,止损也设置在相同的水平。

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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 years and 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.)
我停止了计算2006年4月测试所得的点数,因为它已经完全让我相信这个方法是成功的。我在前些年 随便的测试该方法的使用,而所得的结果让人惊讶。每月平均300点盈利,我交易那些在17:00, 21:00 和01:00 (GMT +2)出现的交易信号。利用这个方法,它每月给出8-10笔交易信号。(我用mt并且由MIG提供数据)
If you use patterns in the MACD that occur regular that gives results and use them every time they occur you will most definitely make money.
如果你用了规则的给出信号的MACD模式,并且每次出现信号的时候便交易,你绝大多数明确的是在赚钱的。
I haven’t discuss nor used trendlines 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 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 makethem 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.
到目前为止在本文中我并没有讨论不用趋势线,而且如果添加他们的话会帮助你更好的确认出场 点。进场点有MACD给出而出场点或者盈利水平则有支撑和阻力水平决定。我用前面提到的移动平均线和Fibonacci然后还用一些明确的确实线和价格水 平。我通常用日图并且按照它画趋势线,然后4H图。我把他们画的很漂亮跟粗,这样我能方便的看到他们。接着我会画出不同的价格水平像1.2900, 1.3000,1.3100等。在这些价位可以找到支撑和阻力。
我希望本问对你独立的金融之路有帮助。

Planning a trade 制定交易计划
There is different ways in planning a trade but this is how I do it.
制定计划可以有很多种,而这是我如何做计划的:

A. This is the entry point determined by the MACD. There is no mystery about the entry. When the MACD satisfy the rules as outlined in the 4 Hour MACD strategy document then enter.
MACD决定的入场点。进场点没甚么神秘,只要MACD满足了4小时MACD策略文章里的要点时即可进场。

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.
获利的第一个区域。我们有3个阻力线分别是8EMA,21EMA和需要突破的 1.2200整位数关口。你可以决定哪一个阻力位做为你的获利目标。如果你可以现场观察它,你总能随时决定平仓,否则你就按你满意的设置。重要的顺序是, 整位数价格第一,然后是21EMA,最后是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.
接下来就是89SMA和1.2100整位数关口。这些都很重要。但是89SMA通常会价格停顿一下或者价格转向。在这样情况下,除非到我的进场价仍有20%的空间可走,否则我会平掉所有头寸。

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.
在D区域上方我们可以看到一根趋势线,这里就是我们所有的头寸应该平掉的地方。价格可能回到SMA200及蓝色区域,但如果我不是坐在电脑旁,我不会考虑趋势线下方的可能。



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 can concentrate in managing the trade.
这就是整个计划的制作了。只要你提前做好计划,接下来的事情就变得容易了。进场不再是重要的因素,由此,你可以更专注在管理自己的交易。

Take partial profit at B, then another at C and then closed out at D. It completely ignored the 89SMA and went straight down to the trendline. When the trendline was hit the MACD indicated a trade upwards with the 89SMA as first barrier and so on and so on and so on.
得到B区域的盈利,再者C区域,最后在D区域全部平仓。价格完全忽视89SMA的阻力并直接下跌至趋势线。当碰及趋势线时,macd指示一个可以89SMA为第一阻力位的做多交易,余下的我们再重新把计划进行。


附录一
I have been on a lot of forums only observing as to the ideas and behavior of people. This forum is the first one I found where people really exchange some useful and positive information.

I always asked myself why is it that only about 5% is making a success of it as the overall claim are amongst brokers. After two years of study and trying about every strategy I could lay my hands on I come to the conclusion that as people differs in looks and in perceptions they also differs in their trading perceptions.
Then I saw people act upon their perception and interpretation of what they feel is the right thing to do. I am right and they are wrong is the type of attitude. Then there are those that follow someone else religiously as long as he give the direction till he is wrong three times in a row than it is off to the next system.

Why am I telling you all about this. If you haven’t tested a system over at least 30 live trades (paper trades) you cannot declare it as successful. After 30 trades you will have the heart of the system engraved inside. What I mean by engraved is that you should make notes about each trade as to emotion experienced, why was it wrong, is it the system or my bad decision, did I stick to the rules, was I following the system or did I use my little version of it etc. etc.

This 4 hour MACD strategy gives a signal with the MACD patterns(round top, lower highs etc.) as to the timing of the entry. It only observe the possible direction due to resent movements. People wants a mechanical system that tells them everything and even do the deal for them. It must draw the trendlines, recognize the patterns, work out the entry, stop and profit levels. There is however one aspect that people ignores and that is that the market has an emotion that is hard if possible to built into a automatic system.

I am going to explain it in this way. When I am sitting on the beach with my back to the ocean relaxing in the sun and there are people playing and running around etc. The fact that people run around does not make me nervous but it is when there is a different kind of behavior in there running that calls my attention. I will most definitely see in their faces what the emotion of their running is. What happens first is that those that saw the reason for their running first are the leaders in this action. The volume of people keeps increasing as the knowledge comes known till the masses start to react. I have five things that I can do.

Firstly I can be a nervous sunbather and jump up every time someone comes running past only to find that it is trying to catch a running ball. Nothing serious. That is how 90% of people do there trading. Jumping after every move only to find it was normal zig zag movements and their stoploss get hit frequently. They get wiped out very quick.
Secondly I can put on my dark glasses put on some sun tan lotion and ignore the running at all as I am covered. These people put in their deal goes fishing and looks after two days how did it goes. Sometimes it works sometimes it doesn’t. After a year of trading they find themselves round about breakeven.

Thirdly there are those that wants to investigate everything in detail as to why. By the time they found out why are the people running they get hit by a tsunami. By the time you found out why the market is running it is to late as it is about to turn around again. They always time the top or bottom but in the wrong direction. You get people that is always late. They get wiped out very quickly.
Fourthly you get those that ran along the moment there is some action going on.
This group does make some profit but it is nervous profit. I call them the news traders.

With time (some accounts does not last till then) you can become good at it, but it is due to experience..
Let me explain to you the concept of the money changers and there actions. When interest rates comes down due to good economic condition these people send out all sorts of ways how to lend cheap money for that trip overseas, new car etc. etc. Till the money availability gets low and spending is sky-high due to the easy way to get money. Then the interest rate is raised by 0.5% and after a month another 0.5% and so on. More money out of the pocket of the consumer that he has to pay back than what he has budgeted for.
Troubled times!!!!!!!!!. They are collecting till the cycle turns again and then it is lending out again.

Have you ever thought of it in the field of Forex trading. So many websites inviting you to buy there system and it tells you exactly(to the pip) where to put your stops and where to enter and where to take profit etc. etc. If I know the cards that you have in your hand when playing against you I will always win. I think the brokers knows exactly where the group stops, entries and exits are. That is why it is important to move with the big ones. They will only take the price as to catch the weak ones. This is only my opinion and I might be wrong. I am only very cautious and suspicious.

There are those that invites you to come and play on the beach of Forex knowing that a tsunami will hit some or other time. All they have to do is get as many people on that beach while they are playing around with them and over time they pass the ball into the hands of the majority but when the signs of a tsunami is nearing they are the first ones to leave without the majority noticing it because they are busy playing. Only there followers knows.

When the tsunami hits they have their deals in to take advantage of the panic selling of the masses. They created it beforehand. Not the tsunami but the playing field conditions. Spreading some news here and there that they know the masses will react upon and so setup the whole scene. When the masses are buying you should be selling and visa versa. That is what a well known speaker and investor says “to step into the pain”.

We as tiny investors does not have the resources to step into that pain as it means waiting for some time before the bubble burst and our capital cannot handle those type of stoplosses as they must be huge to handle the playing area of those on the beach. The money changers can handle that, They will sit for six months and knows that the coming tsunami will make them rich.

Fifthly are those that watches the faces of those that play. Their emotion will tell the overall status. Playing!!!!!!. The big ones leave the scene unnoticeable to the majority. It is only when there followers see they are not there anymore that they started to react. It is at this point where you as part of that 5% must step in. Recognizing the changing emotion and run with them. You might not know why you are running yet but that you will read in the papers and not others reading about you in the papers.
The MACD signal only tells us that a change in motion (not emotion) is taking place. We then have to look for a change in emotion and that comes with the TAIL I was describing in the exercise. There are many formations as to show the change in emotion.
Morning/evening stars, tweezer top/bottom, spinners, inside candles, engulfing candles, doji candles etc. etc!!!!! look at investopedia.com or any educational website for those emotional signal patterns. Study past setups in the MACD signal that produced results and try to recognize the change in emotion. Also study the signals that did not produced results and see if there was emotional activity or not. If you have both in place, the MACD signal together with the emotional signal your chances of success are so much higher.

附录二
The horizontal lines is just there to show overbought and or sold levels especially on the EurUsd. Sometimes the movement is close to the zero and within the fisrt MACD zone. I only use it as benchmarks as to where the MACD are at the moment. If one zooms in then you dont loose sight of the position of the MACD.
The MACD does not have to reach certain levels. It is only when it zig zag accross the zero that one must be carefull but it happens when the price is in a narrow channel waiting for a breakout.
Stoploss is set at the most resent high or low or at least two bars away. Do a bit of backtesting to get the feel for it. I try not to use equal numbers like 30, 40 etc. I rather use 33, 43 etc. Equal numbers seem to be sometimes the target . Stoplosses also depend on the capital and risk profile of each individual. It is with what you are comfortable with but at least out of the way. Because this strategy normally preduces a move right after the entry the stoploss dont have to be big.

It is just because of working schedule and limited internet access during working hours.

These were the amount of deals for 2006 per time (GMT+2)
01:00---25
05:00---34
09:00---17
13:00---46
17:00---52
21:00---29


That also depends on the profit targets. If I can only plan to manage 30 pips out of the deal I want my stoploss not to be greater than that. I sometimes even uses two candles back if the first one is a small candle.
Todays trade (post31) had entry at 1.2915 with stoploss at 1.2890 initially and the previous candles fell nice within that range.
I also takes profit in stages so that when a trade has run to the first S/R I like to get something in my pocket. I like to get to breakeven as soon as possible and the let the rest have its run.


Remember also that the price has broken down through the 89SMA and a pullback to the 21EMA is the rule. But the MA''s is to crowded so I will wait for a breakout first and then confirmation on the MACD as we are in a little consolidation phase. If the price moves away from the 21EMA coming down and the MACD shows our trend continue setup(move towards zero and then turn away) one can consider entering with first target 1.9500 and second one 365EMA. Also watch the trendline as from 8Jan. We are at support. Patients is the name of the game.


As you can see in the samples that it seems that most of the time the MACD gives a positive signal before news comes out. And then I dont mean minutes before it. It will give it some time earlier. The big ones already knows before the news. I will set stoplosses at different levels to minimize the risk and yet to take advantage of the move should it go in my favour.
Inrerest rates and farm payrolls is always dicy and I prefer to close deals before that.


I just want to emphasize someting. I dont trade as to the exact pip. By that I mean if the 21EMA is 39 pips away I subtract my 2 pips spread and then put in a close order for 37 pips. I dont do it that way. Profit after 30 pips is good enough for me. I have lost to many deals with one or three pips to be that exact. If my profit target is at 1.2900 with a possible 40 gain I will take profit at 1.2890 for a sure 30 pips. I dont also trade every signal the MACD is given. Look at history to see which ones give definite gain and study the looks of it. See how it moved in relation to the MA''s.
I have studied the market for two years papertrading before going live. Treat this strategy as a bussines. Draw up a bussines plan and write a Standard Procedure Instruction as to what are the steps in cronicle order when a setup is about to occur.

1. Is the setup according to the rules. Does it looks OK.
2. Are there news ahead
3. What is my risk. Stoploss. Can I afford it.
4. How far away are the first line of profit taking. Is it worth it.
5. How long do I plan to be in this trade. If we are at a 5 year low and I can get in at the bottom I surely wanted to stay in as long as possible. Is it a quick 20 pips against the trend on a pullback.
6. If I cant watch it live how will I manage and protect the trade. Might reduce the stoploss till I can attend live again etc.

This is only an example. Do your own.

A profit not yet taken is not a profit.


That is high risk trades but normally with great profit. As the moves are normally fast I set my stoploss tight at max 23 pips waiting for the price to pierce a little back into the previous candle to give me that extra ten pips on the stoploss or so.

I went both ways in my trading path of almost 10 years. First fundamental and then technical. What I find was that there are some sort of a link between the two. People act upon information and most definitely on their interpretation of that information. It is not so much the info as the interpretation thereof that brings action according to the interpretation. I found that certain technical indicators are actually based upon this interpretation of info. Moving averages are just smoothing out the actions or movements based upon the interpretation of the information. The shorter the period the most resent info are carrying the weight and the longer the period the more and broader info are involved. That is why I don''t trade crossovers of moving averages but rather studied the movement around(support and resistance) this moving averages. To me I don''t see the price or value of a currency but to me it is the actions of people based upon their interpretation of information they have. Thats why one are bying and one are selling at he same time. Different strategies also play a roll. To study fundamentals surely does have its place but for me I don''t have the time nor the resources to do it. And then I will have to predetermine how are the people going to interpret it to try and predict the price movement and when will I enter en where will I exit a trade.I will rather watch the severity of the fundamentals reflected in the currency movements(actions of the people based upon their interpretation of the info) and base my involvement on that through a tested strategy. I am using two short term moving averages, one medium term and one long term moving average as guides as to the direction of movement. Along this different paths of actions I make my decisions. It is not only the MACD that I amwatching. That only tells me to pull the trigger. The support and resistance levels tells me what people are expecting and what people are willing to pay for the information they have. Humans have the tendency to react the same under certain conditions and that is what support and resistance is telling me.
Good luck to you as fundamentals surely is very good as to longer term expectancy and accumilation and adding to positions.


Will definitely not trade it on the MACD strategy. Might do it on the 5 min chart with a different strategy. This is gamble money. Win or loose. Only 2 chances.


News is to risky. I only trade it from time to time. Not on a regular basis. When it goes the one way and turn around I like it.


I studied the movements and interaction between the price movement and moving averages over a period of 2 years. I found that Fibonacci numbers gave the best results as to barriers that makes the price to stay there for a while. I have also found that there is a correlation between the MA''s and the reactions of people regarding to their interpretation of news and where they are willing to take the price. It was more something I obsurved than what I worked out. You can look at history on any timeframe using that MA''s and come and tell us what you have seen. You will be amazed to see it works on any timeframe. The 200SMA is not a Fib number but are a wellknown one amongst traders.

I like analyses and I am a draughtsman and I think that is where it comes from.

I have missed your first question on SMAs and EMAs and cant find it or is it the one in this post you were talking about. If not can you please put it again and I promise that I will respond.


The EMA is giving more weight to the resent price movement then the SMA while the SMA is a flatter. Draw a 100EMA and a 100SMA on the same graph and see what happens. I just found that the 21EMA fit the most resent price movement better. The 89SMA is where if the price is above it the sentiment is bullish and visa versa is bearish. The 200SMA is according to me the overall reflector of the average interpretation of the news and the longterm trend. The 365EMA is long term but it gives more weight to resent data but I must admit it does not play a very prominent and active role. There are certain times when the price will test it away from all the other MA''s. I use it then.


I will only enter when the MACD makes a pullback and give a trend continue signal. 200SMA is only about 20 pips above 1.3000. Not worth it I would say.


The setup starts to look promising. We are however just above the 89SMA which can turn out to be support. I will rahter wait for the continuation pattern for a long to occur or another down candle will confirm the downmove. There are plenty of chances. Be patience.


As you can see. Wait for it. No need to rush it. There is plenty good trades.


Experience

--------------------------------------------------------------------------------

A wealthy old lady decides to go on a photo safari in Africa, taking her faithful, elderly poodle named Cuddles, along for the company.

One day the old poodle starts chasing butterflies and before long, Cuddles discovers that he''s lost. Wandering about, he notices a leopard heading rapidly in his direction with the intention of having lunch.

The old poodle thinks, "Oh, oh! I''m in deep doo-doo now!" Noticing some bones on the ground close by, he immediately settles down to chew on the bones with his back to the approaching cat. Just as the leopard is about to leap the old poodle exclaims loudly, "Boy, that was one delicious leopard! I wonder if there are any more around here?"

Hearing this, the young leopard halts his attack in mid-strike, a look of terror comes over him and he slinks away into the trees. "Whew!", says the leopard, "That was close! That old poodle nearly had me!"

Meanwhile, a monkey who had been watching the whole scene from a nearby tree, figures he can put this knowledge to good use and trade it for protection from the leopard. So off he goes, but the old poodle sees him heading after the leopard with great speed, and figures that something must be up.

The monkey soon catches up with the leopard, spills the beans and strikes a deal for himself with the leopard.

The young leopard is furious at being made a fool of and says, "Here, monkey, hop on my back and see what''s going to happen to that conniving canine!

Now, the old poodle sees the leopard coming with the monkey on his back and thinks, "What am I going to do now?", but instead of running, the dog sits down with his back to his attackers, pretending he hasn''t seen them yet, and just when they get close enough to hear, the old poodle says...

"Where''s that @##### monkey? I sent him off an hour ago to bring me another leopard!

Moral of this story....

Don''t mess with old f @ rts...age and skill will always overcome youth and treachery! Bullsh # t and brilliance only come with age and experience.

When the price is trending it normally breaks through the 89SMA and then pulls back to the 21EMA and then when it continues it could be the start of a strong trend.


Don''t try to take every signal the MACD is given. When there is none on the EurUsd or the GbpUsd we jump to other pairs and then we are actually looking for a trade and it is not going to be long and we will find one. You must not look for a trade. If the system does not have one there is not one.

Stay with the currencies you are fimiliar with.

The facts are in front of me therefore I will do this and that


I call the moving averages highway lanes. Each define a certain speed. The 200SMA very slow, 89SMA slow, 21EMA mediumfast and the 8EMA very fast. If you look at the chart above you will notice that the speed of the market was fast to very fast so that pricelevel won''t stop or slow down the price.

When the price is finding support on the 89SMA twice in a row the speed is slow etc.

Currently the speed of the EurUsd is slow to very very slow as it is around the 200SMA and 365EMA lane

The price then tend to hoover around the support an resistance levels untill the speed changes.

When the price move through the 89SMA and break a trendline and pulls back towards the 21EMA and then continue the trend it is a sign that we might be in a real trend. The 8EMA shows that the price is below on a down trend which indicate we are in the very fast lane. If you go long now on a MACD signal it would on a retracement to inbetween the 8EMA and 21EMA. Check the R:R ratio.


Someone aked me about the live trades I made with this system. The only live ones I made with this system so far are the ones I have done and described in this thread and the live one in the manual. There were one made the 29 Jan 2007 16:00(GMT) on the GBP with gain 109 pips I did not describe as the thread was just introduced. My backtesting showed over 300pips per month. My live trades are going to be described on the thread as I am doing it. I only do the EurUsd and the GbpUsd and entries will be on 16:00 , 20:00 and 0:00 GMT time as I cannot enter at other times due to working conditions.

If you are fimiliar with other currencies you are welcome to enter those and give as some feedback and charts for discussion. I am not going to get involve in prodicting what may be as I have found that people act upon those thoughts with live accounts.

I believe in the rule that the facts are in front of me therefore I will do this and that. I will only act if the MACD shows a signal and I have worked out the probabilities and only if that is in my favour will I enter.

附录三
STOPLOSS

I haven’t discussed the field of stoplosses in the PDF document as it is not a matter of pattern and or standard way. There are no definite rules as to where stoplosses should be placed.
This is the major cause for people loosing money. If stops wont be hit nobody will loose money. I just feel that to little time is spend on discussing stoplosses. We very easily come up with a strategy in detail but not a stoploss strategy. I have done the same giving very exact instructions in the PDF document as to the entries and profit targets but nothing on stoplosses. The question is now----- WHY??????.
I deliberately did not give any details as to stoplosses as that depends on each individual’s profile. For some people a 20 pip possible loss is just to much to handle while other’s can handle 50 pips. The question is how much capital do you have. If you risk 50 pips how much in percentage is that of your total capital. For anyone to expect trading over a long period of time it is of essential importance to risk as little as possible of capital. The excepted rule is not more than 3%-5% of capital.

If your capital is $1000 then your stoploss should not be more than 3% of that which equal $30 or about 3 pips.. Now that does not make sense on a leverage account. That is why trading a mini account(1 pip = $1) with $1000 makes it ten times better and the 3% risk now remains 30$ but it now becomes 30 pips. Some have it that 5% on a system that gives 65+% correct deals is also acceptable. Thus we can risk between 30 and 50 pips on a mini account of $1000 capital and will have a chance to trade over an extended period of time that when we hit that 3-5 losses in a row we will not be wiped out and will still have capital to recover.

Now comes the question of where to set my stoploss when the MACD gives a signal. If your profile (3%-5% of capital) only allows you a 40 pip stoploss and the most resent low/high or two to three bars back or the trendline is more than that away you simply skip the trade. I have given a way to enter at three different levels to reduce the amount of pips risk in the PDF document. You can use that to make a 50 pip risk to about 35 pips overall. That is also done just to make sure that you stay in the business in the future.

One does not necessary have to have all your capital in your account with your broker. You might have $10000 capital of which $3000 is with your broker and the rest in your own bank account. You can than calculate your risk on $10000 as long as that money is available for the Forex. The moment you use of that money ( for personal use) your risk in terms of pips reduces as well because your capital is less.

When the MACD gives a signal it all depends how far away is the support and resistance levels. If it is more than your risk profile just let it passes by. This is how I do it. My risk profile allows for 50 pips max but I don’t like using more than 43. I don’t use equal numbers as you will notice how many times it exactly test those levels. I uses 23,28,33,38,43. Put your stops below the resent support/resistance.

The problem with most people is that they cannot afford 3 to 4 losses in a row as it will wipe them out. Any system has it bad patches. The MACD I believe can and will give 3 losses in a row sometimes. That means 150 pips could be on the cards. Can you still go on after such a loss. If not I suggest you save money till you can survive such a run of bad deals. I have made provision for 200 pips loss in a bad run.
Hope this helped in any sense.

By: Phillip


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