4hr trading strategy

апреля 26, 2018

4hr trading strategy

Daily and 4hr Price Action Strategies.

Not everyone is able to sit at the computer for hours a day and trade. In fact, many of you have full time jobs, family lives that keep you busy, yet you still want to be able to participate and trade in the market.

A lot of times, these are the s I get from people, whereby they have the lives above, and only have a couple hours to trade after work. You don’t want to actively manage positions throughout the day because of work and are looking for a simple way to trade.

If this resonates with you and your situation, I recommend trading rule based daily and 4hr price action strategies.

1) If a strategy is rule based , then all the rules are clearly explained to make a trade. A rule based strategy generally goes something like this;

Conditions A, B and C have to be in place to make a trade.

If you do, place your trade at X, your stop at Y, and your targets at Z.

Obviously i’m paraphrasing, but as you can see, rule based systems make everything very clear to find and trade setups.

If you are having to constantly look for discretionary elements, levels, etc., that takes more analysis and time – something of which is very limited for you.

By having rule based strategies, it simplifies the trading process for you so you can spend more time taking trade setups instead of analyzing and deciding if you actually have a trade or not.

2) Use Set and Forget Strategies.

Along those lines, since you cannot sit for hours, I recommend using set and forget strategies . This means you do not have to manage them as they continue, or have stops based on indicators.

Sure, if you had hours to sit per day and could actively watch the markets, then there are some strategies I would consider managing, especially if they were designed to go for runners.

But, I also have price action strategies which are completely quantitatively based over 10 years, meaning the statistical edge has been demonstrated over the last 10 years. Thus, if you trade them as is, going for a fixed target, you can and will profit based on their edge.

3) Daily and 4hr Price Action Strategies.

First off, there is nothing wrong with trading intraday time frames, using anything under 1hr charts. There are traders making money on every time frame across the board. The time frame is not so important, but more a personal and stylized preference ( also availability ).

However, with limited time to find setups, monitor charts, etc., I recommend the daily and 4hr charts.

Generally, the lower the time frame, the more detailed analysis you have to do and more variables you have to incorporate.

More details + more variables = more time needed to make trade decisions. And time is commodity you have less of.

Statistically, various patterns such as pin bars, inside bars, engulfing bars, etc. can and will test statistically strong for various pairs.

But plug the same method and system on a 30m time frame or less, and the accuracy diminishes tremendously. In fact, accuracy for these 1 and 2 bar systems tended to degenerate tremendously below 1hr time frames. Now it should be noted this is not the case for all systems, and our statistics indicate some systems actually perform better on the 1hr time frame vs. the daily chart, so its not a linear relationship.

Now getting back to the point, 1 and 2 bar patterns are pretty easy to spot and take little effort. But if you have to know the overall trend, then the 1hr trend, along with support and resistance levels for the day, then zoom in to your 5min time frame to read the price action and how its reacting to that level, that can take more time to analyze, find and trade.

However with the daily charts, these are much simpler as you have one main candle to analyze for the day and the overall trend can be easy to spot. With the 4hr chart, only 6 per day. So overall, much less work, yet still enough to keep you active on a daily basis.

Along those lines, there is one last key point I want to make.

Not all server times perform the same. Generally, there are three major server times broker platforms are set to.

Another possibility is the NY daily close .

I have actually statistically tested about 11+ price action patterns across all server times, and their performance can vary incredibly. Some people state the NY Daily Close is the best.

But statistically, this time fails for many patterns and pairs. In fact, a pairs performance can vary wildly for the same price action pattern across different server times.

Crucial information? Absolutely!

Imagine you are trading an inside bar pattern on the daily time frame for a certain pair, based on the NY Daily Close. But statistically, that pattern is < 40% accurate. Would you want to know that before trading it? Hopefully so.

Some pairs did statistically better across several server times, but completely failed on another for one price action pattern. Yet on the same server time they failed on for pattern A, they profited highly on for pattern B.

Volatility and order flow for that pair in relationship to the sessions. That plus the type of pattern all played a part.

Regardless, server time is key and it is critical you understand how your price action pattern performs, whether it’s a pin bar, inside bar, engulfing bar, or whatever. Information is key here.

For those of you who have very busy lives, with a full-time job, family, and general commitments that you are unable to sit and trade for hours, there is a way for you to trade and participate in the markets, while not having to stay up all night.

For this, I recommend trading Daily and 4hr price action strategies that are rule based, easy to manage, yet allow you to be engaged in the market and able to make money.

Generally set and forget strategies will be easiest to manage, while also making sure the server time is appropriate for your strategy. If you have all those in place, then you can trade on a weekly basis, make plenty of trades to be engaged, not have to hold positions for days on end to see a result, and only need a few hours to trade per day.

I hope this helps for all of you who fit into this category and that you found this article informative and useful.

Please make sure to leave a comment below and your thoughts on it, along with clicking the like button 🙂

Buddhist, Trader and Philanthropist.

I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform . As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

Want to Learn Price Action Strategies for Trading Forex?

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Forex trading strategy #32-a (4hr MA Trends)

Submitted by User on June 29, 2010 - 16:48.

Submitted by Egudu.

This is Egudu, I want to give you guys a cool system and it's simple.

Indicators: 5 SMA applied to close, 14 SMA applied to close and EMA of 144 and 169 applied to close.

Time Frame: 4hrs only.

The 144 and 169 gives the direction of trend, I mean when 144 above 169 it's an uptrend and if below it's a downtrend.

You use the 5sma to enter the market in the direction of trend while you use the 14sma to enter against the trend.

In the direction of the trend given by the two ema, when a candle closes below the 5sma for a sell and above it for a buy, while if against the trend as given by the ema, when a candle closes below the 14sma you enter a sell and above it for a buy.

Stoploss is always the high of the signal candle or low.

Now this system is pretty cool and wonderful, suggestions and questions are welcome. Thanks.

I have attached charts for visuals:

Can i use this system for 1 hour? or maybe do you have other settings to be used on 1 hour?

i guess you can but the whips would be too much, so if you can bear it, but i recommend 4hr thanks.

However I think it would be better to have at least another confirmation before entering to avoid whipsaws. Such as Stocs at OB/OS and also to look out for divergence. What do you think? NewBoy.

Good and simple system. When do you exit the trade on profit? Thanks.

Thanks to all, i would say there's really no exit, just use a trailing stop to trail it, or whatever your stop loss is, just target twice or thrice it. And for confirmation using stoch. or other stuff, i really dont like it, just enter when the signal says so, and even the whips that result to loss are small when compared to the profit from it if u follow it. i am still open to suggestions.

now like i said i really want to help traders in this forum, for a quick entry, i use a kind of candle pattern, and here is it, when you have a candle having the same open and high after a three candle uptrend, you enter the market for a sell, and the reverse is for a downtrend. this candle pattern is almost magic, just look at it, there all other ones i use which i guess i would tell you guys, so enjoy and ask me any questions, and i would recommend that you guys check out the 1hr reversal system. i would have love to post charts on it but just check it out first then make your observations, thanks.

"while if against the trend as given by the ema, when a candle closes below the 14sma you enter a sell and above it for a buy"

Could you elaborate above using chart?

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The Four-Hour Trader, A Full Trading Plan.

Price action and Macro.

Traders can implement a well-heeled plan taking only four hours per week The four-hour chart can be ideal for Forex Traders looking to trade around the clock We outline a full plan based around Price Action that traders can begin using today.

All of the sudden, the world has gotten very small; and life is moving faster than ever before.

The internet presents a lot of benefits to the human species; but time management is not one of them. As competition for page views, viewer numbers, and attendance continues to heat up, very little in this life emphasis a slow and steady approach.

But to the trader, in many cases, that is the best way to go about speculation in markets: Slow, steady, and consistent.

But being there as a trader, and getting there as a new speculator are completely different markets. In this article, we’re going to outline a complete trading plan that will take less than four hours of a trader’s time each week. And further, this is an approach that can be focused on longer-term moves, and swings.

If you have a day job, or any other pre-existing commitments that limits your time on charts, this is an approach that can offer quite a few benefits.

The Center of the Approach.

The 4-hour chart plays a special role in the FX market.

Most equity markets are open between 8 and 9 hours each day, and as such, the four-hour chart might take on less importance. After all, a four-hour chart just shows two bars for each trading session, so traders might as well just look at the daily chart.

But in the Forex market, the four-hour time frame takes on special importance. The market never closes, and traders are literally Trading the World . The four-hour candle represents half of each geographic trading session. Each of these sessions can take on markedly different tones, and that is where traders can look for potential opportunities.

In the FX Market, traders are truly ‘Trading the World’

Traders can use the price movements and gyrations on these four-hour charts to analyze markets, and find potential pockets of opportunity.

Watch for the close of each 4-hour candle that you can. Using the New York close to define ‘financial time’ means that we’re seeing candles close at 5, 9, and 1 AM and PM (based on ET). If you’re using Central Time, that’s 4, 8, and 12 AM/PM while Pacific Time is 2, 6, and 10 AM/PM.

If you’re busy at the time, Mobile Applications can generally offer you what you need to perform the analysis at the close of each of these candles.

Traders can then take a ten-minute block of time upon the close of each of these four-hour candles to look for potential trade setups, while also using this as an opportunity to manage risk.

If the trader is awake for four of the six four-hour candles that form each day that would mean that the trader would need approximately 40 minutes per day to analyze charts. If time permits, an additional 10-15 minutes can be used at or around the daily close.

The total time commitment required is 40-50 minutes each day, for a total of 200-250 minutes per week (240 minutes is 4 hours).

Use Price Action to locate the strongest trends.

Trends in markets can be easily graded and seen with price action… by simply looking for charts to make progressively higher-highs, and higher-lows (in the case of an uptrend), and lower-lows, and lower-highs (for downtrends).

Price Action can help traders locate the strongest trends.

Higher-highs and Higher-lows denote an up-trend per Price Action.

In the article Price Action, an Introduction we look at a way that traders can grade trends without the use of any indicator at all, using just past prices.

Traders want to look to trade in the direction of these trends; buying up-trends, and selling down-trends. But, is it enough to just buy up-trends or sell down-trends and ‘hope’ that they continue? No. Traders can use price action to appropriate their entries into these positions.

Use Price Action to buy up-trends cheaply, and sell down-trends expensively.

Once a strong trend has been located, the trader can then look to plot their entry by looking for a ‘trigger’ into the position via price action.

Once again, traders want to look to efficiently buy up-trends when price is cheap, or near support. We looked at how traders can find this support in the article, Price Action Swings .

Traders can look to buy up-trends after a recent swing low.

Traders buying up-trends can wait for a ‘higher’ swing low to form before entering.

Traders can look for additional confirmation of the entry by looking to the price action candles that form at or around those swings.

We looked at quite a few of these triggers in Trading Bearish Reversals (for down-trends) , and The Hammer Trigger for Bullish Reversals (for up-trends).

Traders can look for bullish triggers at or around recently printed new lows.

Use Stops and Limits to Enforce Favorable Risk-Reward Ratios.

We talk about this a lot at DailyFX, and there is a reason for it: It’s important!

One of the main premises of our price action education is that future prices are unpredictable, and as such, there is no such thing as a ‘holy grail’ or ‘can’t lose’ strategy.

By adding a stop and limit, and letting the trade work – the trader eliminates the possibility of making a knee-jerk reaction that they may end up regretting. It also enforces a favorable risk-reward ratio, and puts traders in the most promising spot to avoid the number one mistake that Forex traders make.

Since traders are looking at their charts for each four-hour bar, they have built-in trade management for each position that they take on.

Traders can use the close of each four-hour candle as an opportunity to adjust stops ( particularly the break-even stop ), or to take profits while also looking to trigger new positions.

Traders can take this a step further by trailing their stop in an effort to lock in gains in the event that the trend gets especially built-in. We looked at this premise in Trading Trends by Trailing Stops with Price Swings.

Traders can lock up gains to maximize trends.

Created by James Stanley.

-- Written by James Stanley.

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Past performance is no indication of future results.

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4HR GBPUSD Forex Trading Strategy.

The 4HR GBPUSD Forex Trading Strategy is a trend trading forex strategy that has the potential to average more than 100 pips a month in profit ( if there is a good trending market in the GBPUSD currency pair).

Time Frames Required.

The 4hr GBPUSD strategy is a multi-timeframe trading strategy so you require the 4hr chart as well as the daily chart.

You need both timeframes to make your trading decision.

Here’s the important thing you need to know:

The daily timeframe is used to identify the main trend, where the market is up or down and the 4hr timeframe is used for your trade entry.

Forex Indicators Required.

You need a few forex indicators for this trading strategy and here they are:

slow stochastic indicator with these settings(13,5,5) applied to both charts, Exponential moving average 4, EMA14, and EMA 50 on the 4hr chart.

Before Trading.

Before you buy or sell, you need a good filter to filter out potential bad trade setups with this forex strategy. Your filter is the stochastic indicator.

You need to check the stochastic indicator on the daily chart.

For Valid Long Entry: Slow %K above Slow %D on the Daily Chart For Valid Short Entry: Slow %D above Slow %K on the Daily Chart.

Note : the %K&%D on the stochastic indicator are the two lines seen on the chart above, that would cross each other similar to a moving average cross over.

The reason for doing this pre-trade check on the daily timeframe is to simply to identify the main trend first because the daily trend has a lot more weight than the trend in the 4hr timeframe.

4Hr GBPUSD Trading Strategy Rules.

Here are the selling rules:

when 4 EMA first crosses 50 EMA followed by 14 EMA to the downside on the 4hr chart, then open a sell trade at market order or with a sell stop pending stop order on the new opening candlestick Place stop loss should at 50 pips. You can set your take profit at 150 pips which is 3 times what you risked or Exit the trade when 4 EMA reverses and crosses 14 EMA on the next open candle.

This chart below show you the how to take a short(sell trade) and where to exit:

Here are the buying rules:

when 4 EMA first crosses 50 EMA followed by 14 EMA to the upside on the 4hr chart, then open a buy trade at market order or with a pending buy stop order on the new opening candlestick Place stop loss should at 50 pips. You can set your take profit at 150 pips which is 3 times whatyou risked or Exit the trade when 4 EMA reverses and crossed 14 EMA on the next open candle.

Advantages of The 4HR GBPUSD Forex Trading Strategy.

You enter a trend just (or right after)after exponential moving average crossovers happen so this allows you to get into a trade just after a trend has started instead of getting on a trade at halfway point of a trend in progress. If the trend is strong, you’d easily makes some good amount of pips (potential for 100 pips plus profits or more) because this is based on a 4hr timeframe. when you use the stochastic as a filter on the daily timeframe for trend direction, you eliminate going against the main trend and increase your chances of your trade being successful when you take it in the 4hr timeframe.

Disadvantages of The 4HR GBPUSD Forex Trading Strategy.

The entry of the 4hr GBPUSD Trading Strategy is the biggest problem simply because it uses moving average which are lagging indicators. The ideal entry point would have been anywhere from 2-7 candlesticks prior. another potential problem with this strategy is that sometimes, when you enter a trade, the market may be due for a temporary pullback or rally and if your stop loss is close by, you are going to get stopped out. The 4hr GBPUSD forex trading strategy will perform badly in ranging market as it is designed for a trending market.

Can the 4HR GBPUSD Forex Trading Strategy Be Applied To Other Forex Pairs?

Yes, you can. But I suggest that you only trade currency pairs that have good trending characteristics.

Please don’t forget to click those buttons below to share the GBPUSD forex trading strategy your friends, it would really mean a lot, thanks.

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