Forex for a trader
Forex four hour trading strategy

Forex four hour trading strategyProfitable Forex Strategy Using 4 Hour Charts. Here’s my profitable Forex strategy that I use consistently. I found this from a forum years ago with great documentation and simply applied it. It’s probably one of the most effective strategies around in my opinion and it’s completely documented with PDF’s. Before I explain this, there’s a 20 page PDF you can download below that will explain in detail on how to analyze the trends. I’ve been trading Forex now for almost 5 years and believe me I’ve had my fair share of ups and downs. I’ve tried many systems, indicators, robots and managed accounts. It’s taken me this time to customize a winning system with using my own trading strategy that has now enabled me to become a profitable trader. I found this strategy from another trader and there was great documentation on it. I simply analyzed it, applied it and I’ve been very succseful with it. I am going to explain a very simple system here in detail and hopefully you too can apply what I teach. Keep in mind, I do use Forex robots as well, but only to validate trades and compare to my own personal trading system. One of these systems that I recommend is Forex Trendy by far. It is the best trend scanner available for an affordable price. Now for the system that I use in conjunction with my trading robot. Grab a 4 hour chart and place the following indicators. A 89 simple MA, 21 exponential moving average and a 200 simple MA. The pair I favor the most and trade this system on is the EURUSD pair. I love this pair bc it doesn’t move too fast, it trends consistently and it seems to be the most predictable. Not to mention over the years I’ve noticed this pair seems to bounce off of .80 and .30 a lot. For example, there’s always a good chance price will bounce off of 1.2730 or 1.2780.

I am not saying it does it all the time, but these are good barriers in a lot of cases. Simply put this system is based off of the pair pushing through the 89 SMA then pulling back to the 21 exponential moving average and trading with the trend. However, MACD is used to confirm the trading signals. I’ve attached a PDF below that details how I trade this setup step by step. I must say it’s extremely effective and it does take some practice. Download The Ebook Download Now. The Four-Hour Trader, A Full Trading Plan. by James Stanley , Currency Strategist. Price action and Macro. Your Forecast Is Headed to Your Inbox. But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Your demo is preloaded with ?10,000 virtual funds , which you can use to trade over 10,000 live global markets. We'll email you login details shortly. You are subscribed to James Stanley. You can manage you subscriptions by following the link in the footer of each email you will receive.

An error occurred submitting your form. Please try again later. Four Hour Trader Talking Points: 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 AMPM while Pacific Time is 2, 6, and 10 AMPM. 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. 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 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. James is available on Twitter @JStanleyFX. The 4 hour trading approach requires a solid psychological foundation to markets. Check out our Building Confidence in Trading g uide to learn more about the mindsets behind trading. DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. 4-Hour MACD Forex Trading Strategy. Forex traders can look to earn money in a variety of ways. One means is to trade on longer term frames i. e. 4-hour and above. This method demands a sheer amount of patience, but the good thing here is that you can have a winloss ratio of below 50% and still be in the profits.

The 4-Hour MACD forex trading strategy is built around the highly popular MACD indicator and delivers great entry and exit signals for any currency pair. Chart Setup. MetaTrader4 Indicators: forexsignals. ex4 (Inputs Variable Modified; period=14, Stoplosses=false, ShowInformation=false), Trend_Mirror. ex4 (Inputs Variable Modified; MovingPeriod=40.0, MovingShift=2.0), MACD (Default Setting) Preferred Time Frame(s): 4-Hour. Recommended Trading Sessions: Any. Currency Pairs: Any pair. Download. Buy Trade Example. Strategy. Long Entry Rules. Initiate a buy entry if the following indicator or chart pattern gets put on display: 1. If the yellow upward pointing arrow of the forexsignals custom indicator pops up below the candles as seen on Fig. 1.0, price is said to be pressured higher i. e. a trigger to go long on the designated forex pair. 2. If the red line of the Trend_Mirror custom indicator cuts through its blue line to hover above, bulls are said to be pushing price to the upside, as such a buy alert is imminent. 3. If the green histograms of the MACD MT4 indicator break above the 0.00 level as exemplified on Fig. 1.0, a buy signal is said to be in the offing. Stop Loss for Buy Entry: Place stop loss 5 pips below trading support.

Exit StrategyTake Profit for Buy Entry. Exit or take profit if the following rules or conditions takes precedence: 1. If a red downward pointing arrow of the forexsignals custom indicator pops up during a buy alert somewhat above price bars (see Fig. 1.0), it is a trigger to exit or take profit at once. 2. If the red line of the Trend_Mirror custom indicator intersects the blue line to stay below while a bullish trend is ongoing, a bearish reversal is said to be looming, as such an exit or take profit will suffice. 3. If the MACD MT4 indicator displays a green histogram that is placed below the 0.00 level during a buy signal, bulls power is said to be weaning, as such an exit or take profit will do. Sell Entry Rules. Enter a sell order if the following holds sway: 1. If the red downward pointing arrow of the forexsignals custom indicator pops up above price bars as depicted on Fig. 1.1, price is said to be pressured lower i. e. a trigger to go short on the fx pair of interest. 2. If the blue line of the Trend_Mirror custom indicator cuts through its red line to hover above, bears are said to be pushing price to the downside, as such a sell alert is in the cards. 3. If the green histograms of the MACD MT4 indicator dip below 0.00 level as illustrated on Fig. 1.1, a sell alert is said to be looming. Stop Loss for Sell Entry: Place stop loss 5 pips above trading resistance. Exit StrategyTake Profit for Sell Entry. Exit or take profit if the following takes to the fore: 1. If a yellow upward pointing arrow of the forexsignals custom indicator pops up during a buy alert slightly below the candles, it is a trigger to exit or take profit immediately.

2. If the blue line of the Trend_Mirror custom indicator intersects the red line to stay below during a sell trigger, a bullish reversal is said to be pending, as such an exit or take profit will do. 3. If the MACD MT4 indicator displays a green histogram that is aligned above the 0.00 level during a sell signal, bears power is said to be halting, hence a trigger to exit or take profit forthwith. Sell Trade Example. Free Download. About The Trading Indicators. The Forexsignals. ex4 custom indicator is a trend indicator that delivers buy and sell signals via its yellow and red arrows respectively. The arrows come with an attached star that is filled with the same color as the arrow. The Trend_Mirror. ex4 is an important custom indicator that delivers buy and sell signal when the red line red line crosses the blue line. The Moving average convergence divergence (MACD) is a trend-following momentum indicator that reveals the connection between two moving averages of price. 4 Hour Forex Trend Following Strategy With Moving Average. Here’s a great versatile trading strategy that can be used to buy and sell trend reversals or to buy dips in an established up trend or sell rallies in an established down trend. Chart Setup.

Indicators: 200 Period Exponential Moving Average, MAAngle with default settings Preferred time frame(s): 4 Hour Trading sessions: Any Preferred Currency pairs: Majors + Currency Crosses. Download. 4H EURUSD Chart: How to enter a trade? As the above chart illustrates, go short at the open of the next bar when the price trades below the 200 EMA and MAAangle indicator bar color brown. On the contrary, go long at the open of the next bar when the price trades above the 200 EMA and MAAngle bar color green. In an established up trend, go long when the MAAangle bar color changes from yellow or brown to GREEN (buy dips). In an established down trend, go short when the MAAangle bar color changes from yellow or green to BROWN (sell rallies). See trading example below for better understanding of the trading concept. Click the chart to enlarge.

Trading Rules. Buy Rules: Price above the 200 period moving average Wait for the MAAngle to change from brown or yellow to GREEN color. Execute long trade! Place stop loss below the previous swing long or 1 pip below the 200 EMA. Price objective: Risk X 1.5 or better (i. e risking 50 pips to make 75 pips) Alternative take profit method: Take profit at the previous swing high level (resistance). Sell Rules: Price below the 200 period moving average Wait for the MAAngle to change from green or yellow to BROWN color. Execute short trade! Place stop loss above the previous swing high or 1 pip above the 200 EMA. Price objective: Risk X 1.5 or better (i. e risking 80 pips to make 120 pips) Alternative take profit method: Take profit at the previous swing low level (support). forex four hour trading strategy. Friday, April 23, 2010. Forex London Breakout Strategy. This London Breakout Strategy was based on price breakout of the trendline. Using no basic indicators but trendline. This strategy using 1 Hour chart timeframe and recommended pair to trade were GBPUSD and EURUSD.

Other pairs may also be used to tested. This London Breakout strategy was claimed has a win ratio of over 90%. Before you go with live account is recommended to use a demo account until you are familiar with this strategy. For this Forex system to work properly a trader needs to know the basics of drawing trend lines and be able to identify support and resistance lines. Our working range includes 5 candles: from midnight to 04:00 EST (including the 04:00 candle). Optional: draw a midnight vertical line for visual aid. With those 5 candles look for valid swing high and swing low of the price. Draw a downtrend trend line connecting a found swing high to the most recent swing high of the previous days (make sure the last one is a valid high to draw a downtrend trend line through it). Do the same for a swing low: connect it to the most recent swing low of the previous days, make sure you are putting in the right trend line using the rules of drawing uptrend trend lines. If a trader sees, for example, no swings high in the 5 candle range, that means there will be no downtrend trend lines this morning. The Entry is on the break of either one of the two trend lines and is immediate without waiting for a current candle to close. A protective stop is placed just above below the candle that broke the trend line. Usually the whole trade will unfold within the next three candles (count in the candle that broke the trend line).

So, after the actual breakout we have 3 hours or 3 candles to trade, after that we will exit the trade with whatever profits are made. Main rule - Using SR + timing: Profit target is going to be the nearest level of support or resistance according to the SR lines. If, however, after only one candle this target is reached, it suggests a very strong market, we would therefore stay in the trade and set our goal for the next support resistance level. We would also choose the second SR level as our profit goal if the first SR level appears to be close to our entry point. We have three candles to trade after the breakout, thats why we can trade calmly and allow our goal to shift to the next SR level. It is at the traders absolute discretion whether to set the target at the nearest SR level and exit the trade once the target is hit or use 2 or 3 consecutive candles. Another simplified option would be with fixed targets and timing. For example, EURUSD target = 20 pips - spread. GBPUSD = 40 pips - spread.

These are only suggestions. For other currency pairs you will need to back or forward test. Thats it! Properly applied this London breakout strategy is more than 90% effective. Forex simple trading and success. What is Forex? Foreign Exchange or Forex is a globally trusted market used for the trading or exchange of currencies of different countries. It is the world’s largest financial market. Millions of people from different walks of life are an active part of Forex or foreign exchange market. With the passage of every year, the Forex market is growing in size and becoming more accessible to common people. It is the market of 21st century and million of people from all over the world are relaying on it to achieve their financial goals. With the advancement in the technology and communication science, Forex has become a huge market but still it has more potential of growth and rise. In the years to come, it may become the trade of choice for many traders. The new generation of traders and investors is seeking exciting opportunities in Forex trade.

Forex or Foreign Exchange Education Forex or foreign exchange trading is a very tricky and risky task. Without having proper training and education, one has very limited chances of success. The most important cause for the failure of Forex traders is their lack of Forex training. A quality Forex Education or Training helps the Forex traders to improve their trading abilities and skills. Only a well educated or trained Forex trader understands the complexities and subtleties of Forex trade. Proper Forex training teaches the trader a sound trading strategy and an effective approach to currency trading. A qualified Forex trader can explore the opportunities much easily and extensively. Performing a daily analysis on London open is a handy way to improve the Forex trading skills. There is no hard and fast rule for Forex education.

Success with Forex trading comes with experience, practice and learning new skills. With getting experienced, a trader get more disciplined and controlled in his emotions which is a must trait for Forex trader. Learning and being familiar with the foreign exchange basics is one of the most important things you need to consider if you wanted to dig in to the world of currency trading. At its most general sense, it is necessary to get into Forex with the right mindset and skills. Having a natural mentality for conducting this kind of business because once you have this it will be a lot easier for you to know how you will play the game. To get yourself familiar with the Forex Trading, let me discuss the basic things you need to know. 1. Discover how to maximize your profits – Do not be too confident with knowing just one method of trading. It would be best to try various forex trading methods so you will also become more familiar with how other traders run their business. Check the market for other possible trades. Don’t focus on the individuals but you must also try to get the market share of big businesses because these financial institutions are the ones which need a continuous flow of currencies. 2. Be a smart trader – No matter how much you know the all the technicalities that come with trading currencies, this will not be enough once you start dealing with different personalities in the market. You should also aware of proper timing of when it is okay to take a risk and when would it be best to just let it pass you by. In the Forex market values and rates are constantly changing and in a matter of minutes, prices may fluctuate so you need to keep your instincts on alert. 3. Impart discipline in trading – You must have a system which you follow throughout the whole period of your trading. Using a system can help you figure out your strength and weaknesses so you can address them accordingly.

You should also budget a specific time for trading. You have to make sure that when you trade you give full attention and you doing anything that is unrelated to it because you will need a lot of focus. Always trade according to the set rules and regulations. Most importantly, you have to keep your word should you opt to do business with other traders on a set date or on pre-agreed rates. 4. Don’t stop learning! – The Forex trading basics still develops and gets furnished through time. So trader must be open minded and should consider the fact that you will need to educate yourself through constant learning regarding the trade. Keep yourself updated of the latest technologies and methods being used. Allot some time to do research about foreign currency trading and read some related news on this industry. Take advantage of the free learning materials that you can conveniently obtain online. 4 Hour RSI SuperTrend Forex Strategy.

This is a typical trend following forex strategy designed for the 4 hour charts. You can use it on the most popular currency pairs. The rules are very easy to understand. Good luck! Chart Setup. Indicators: SuperTrend, Relative Strength Index (RSI), Fisher Time frame(s): 4 Hour Chart Trading sessions: All Currency pairs: USDJPY, GBPUSD, AUDUSD, EURUSD, USDCHF, USDCAD. Download. USDJPY 4 Hour Chart Example. Trading Rules. Buy Conditions: Supertrend line must be green (uptrending market) RSI(14) touches 70 level Fisher green (bullish trend confirmation ===>> Enter BUY trade. Place a 75 pip stop-loss and 100 pip price objective. Important: Always exit buy trade when the Supertrend indicator changes from green to red color. Trade result: The USDJPY 4 hour chart provided us with 4 signals, 2 buys and 2 sells for a total profit of 125 pips.

The last sell trade is still open. Sell Conditions: Supertrend line must be red (downtrending market) RSI(14) touches 30 level Fisher red (bearish trend confirmation ===>> Enter SELL trade. Place a 75 pip stop-loss and 100 pip price objective. Important: Always exit sell trade when the Supertrend indicator changes from red to green color. Profitable Forex Strategy Using 4 Hour Charts. Here’s my profitable Forex strategy that I use consistently. I found this from a forum years ago with great documentation and simply applied it. It’s probably one of the most effective strategies around in my opinion and it’s completely documented with PDF’s. Before I explain this, there’s a 20 page PDF you can download below that will explain in detail on how to analyze the trends. I’ve been trading Forex now for almost 5 years and believe me I’ve had my fair share of ups and downs. I’ve tried many systems, indicators, robots and managed accounts.

It’s taken me this time to customize a winning system with using my own trading strategy that has now enabled me to become a profitable trader. I found this strategy from another trader and there was great documentation on it. I simply analyzed it, applied it and I’ve been very succseful with it. I am going to explain a very simple system here in detail and hopefully you too can apply what I teach. Keep in mind, I do use Forex robots as well, but only to validate trades and compare to my own personal trading system. One of these systems that I recommend is Forex Trendy by far. It is the best trend scanner available for an affordable price. Now for the system that I use in conjunction with my trading robot. Grab a 4 hour chart and place the following indicators. A 89 simple MA, 21 exponential moving average and a 200 simple MA. The pair I favor the most and trade this system on is the EURUSD pair. I love this pair bc it doesn’t move too fast, it trends consistently and it seems to be the most predictable. Not to mention over the years I’ve noticed this pair seems to bounce off of .80 and .30 a lot. For example, there’s always a good chance price will bounce off of 1.2730 or 1.2780. I am not saying it does it all the time, but these are good barriers in a lot of cases. Simply put this system is based off of the pair pushing through the 89 SMA then pulling back to the 21 exponential moving average and trading with the trend.

However, MACD is used to confirm the trading signals. I’ve attached a PDF below that details how I trade this setup step by step. I must say it’s extremely effective and it does take some practice. Download The Ebook Download Now. 4 GBPUSD Forex . , GBPUSD 4- EMA, , . , 100 . : (13,5,5) 4, EMA14, 50 4HR. : 4 EMA 50 EMA 14 , . - . 4- . - 50 . , 4 EMA 14EMA . . : % K % D . : % D Slow% K . : % &%D , , . 5. , . 6. 3 . : , . . : , , . , - 2-7 . , , , - , . . : , . . 4 GBPUSD Forex Metatrader 4 (MT4) (s) . . 4 GBPUSD Forex , . , . Trading the 4hr Charts. Verified Profitable Trader. The 4-Hour Chart. No, this is not a Timothy Ferriss promotion or new book, but an examination of the 4hr chart, along with the how and why I recommend using it for your price action trading. If you are in the beginning or developmental stages for learning how to trade the forex market, I definitely recommend learning to read price action off the 1hr, 4hr an daily time frames. For our purposes, we will concentrate on the 4hr chart. Some Advantages of the 4hr Time Frame? Price Action is the result of order flow (the total summation of all buy and sell orders). It really matters not why people buy and sell, or if they are buying and selling, what matters is who has dominant control of the market, where is the market most likely to go, and how can we trade it. With that being said, a few minutes of price action can more often than not, represent a false move, perhaps Toyota buying some USD with JPY, and very likely have any significant force behind it to drive the market, bring in other players, and be the start of a big move.

Think about it…how many 1min, 3min, 5min, 10min, 15min, or even 30mins of price action throughout the day will really be representative of a major move and driving force throughout the day? Now, think about the 4hr chart. No matter how you slice it, 4hrs is half of a trading session (for the most part). For any trading session, a 4hr candle will represent a large sum of order flow, sentiment, continued or sustained buyingselling, etc. If a rejection happens on a 4hr chart, it likely represents a large rejection because to sustain that rejection, the market had to close the entire 4hr candle while maintaining the rejection till the end. If it rejects during the 4hr candle, but closes exactly where it rejected, then it wasn’t that important because it couldn’t sustain that rejection in time. Time is a critical component when reading price action and representing order flow. In many cases, the longer price reactsrejects off a key level, the longer it holds from that rejection, the stronger it can be. Of course the price action context leading up to it is key and informative, so make sure to understand this. But if a key level can sustain the directional move for 4hrs as opposed to 5mins, then it had to do so through increased order flow and participation from the market. That communicates there were more players and more money behind this move. But on a 5min candle, or even a 1min candle, this could be nothing and represent littlemeaningless order flow with no real potency behind it. It could be the result of some minor profit taking which creates a negative feedback loop in terms of order flow and price action. But do this for 4hrs and sustain it into the close, and we are talking more participation, orders, money and participants. For price to sustain a particular price action move for 4hrs means no matter how many players, sentiments, and ideas there were participating in the market, the dominant theme held for half the trading session and quite a long time. But on a one min time frame, a 5min, or even 30min time frame, these moves could be simple noise which can move the market up to 30pips without having any major force behind it. Think about how many 5min candles in between the NY close and Tokyo open and how much order flow will really be behind that?

Think about how many 1min and 3min candles will be between the 3rd and 4th hours of the london session (where volatility and pip ranges generally decrease) and how they will represent less order flow and participation. Then you will see how ineffective these candles can be and how what your reading has very little meaning. One and Two Bar Patterns. Continuing with that logic, for those who trade pure price action patterns, like an inside bar (which is a 2 bar pattern) shows up on a 1min, 3min, 5min or even 30min time frame, it is much more likely to be absolutely meaningless than an inside bar which shows up on a 4hr time frame. Think about it, if price holds inside the previous price range on a 5min candle, that could mean almost anything and be the result of a laundry list of order flow environments and situations. 5mins of price going nowhere could mean anything and have very little direction on upcoming order flow. But apply an inside bar on a 4hr time frame, and you are talking 4hrs of price action being held in a range for almost half an entire trading session. That means no matter how many players participated in the market, nobody was able to break the previous price range for an entire 4hrs which tells you a) price was pretty suppressed, b) very little directional control in the market, c) very little participation. That is much more communicative in terms of information than any passing 5mins.

The market could be in a dominant trend, but be simply pausing for 5mins because its coming to lunchtime, there were some short term counter-ordersforces in the market that will be quickly absorbed, a little profit taking (again, a negative feedback loop on price action and thus, not great for trading). Technically, for an inside bar pattern, you would be basing your decision on 8hrs of price action since an inside bar pattern is a 2bar pattern (thus 8hrs), so there is a lot more information in this then an inside bar pattern on a 5min time frame (10mins of price action). Furthermore, to get any real significant amount of data with confirmation and continuation of the order flow (and price action), you need far more 1min, 3min, and 5min candles to make sure the noise is filtered out. That means more moving parts and more variables to manage. Contrast to the 4hr chart where one candle (or two) can give you all the information you need to make a trade while filtering out any noise and meaningless price fluctuations. For an interesting story about meaningless price fluctuations, make sure to put in a question in the comment box below and i’ll tell you a story which will blow your mind. In Conclusion. As we can see, when trading and reading price action, a 4hr candle will offer us much more information, and have a cleaner look and feel to it than any 1min, 3min or 5min chart. This will make it easier for you in your learning process as you’ll be making decisions off of less false signals, more information and cleaner charts. The 1hr, 4hr and daily time frames will have a greater communicative value about direction, clear supportresistance levels, what is a key rejection, who’s in control, while filtering out noise and meaningless order flow and price action. This will give you less confusing information in the beginning, and teach you how to be patient with your trading. Once you have developed your skills, have some experience and confidence under your belt, it’s really up to you from there how you want to trade, whether it be on the smaller time frames (1min – 30mins) or larger time frames (1hr, 4hr and daily). At that point, it’s a question of style and life - style . But it should be noted we aren’t saying trading on the lower time frames is meaningless. One can trade price action on any time frame and make money. In fact people are making money on almost every time frame available.

Just understand you have to increase your price action skills and ability to read price action context before trading lower time frames. For some people’s brains, it doesn’t work with their natural wiring and dispositions. For other traders it does, so the key is finding what works for you. If it hurts your brain, then it likely isn’t for you, so make sure whichever style you trade isn’t hurting your brain, but engaging it well. For those of you wanting to learn how to read price action and the order flow behind it, take a look at our Advanced Price Action Trading Course where you will learn rule-based price action systems to trade the forex market. Please remember to leave your comments below and to ‘Like’ and ‘Tweet’ to share the article. Also make sure to check out our most recent article on Price Action Trading. Forex four hour trading strategy. There is a common wisdom that all traders will sooner or later come to the conclusion that the optimal timeframe for online trading is one day and more. However, it is difficult to say is it true or not, because basically the difference between timeframes is determined rather by the size of the deposit and the free time which trader has. There is, of course, the presence of the so-called "noise" movements at the less than one day intervals, but fractal analysis settles this problem as well by applying mathematical calculation for all hardly predictable price movements.

Nevertheless, Forex trading systems in the interval less than a day make not a daily profit for many traders only, but also the perfect combination of energy spent and the income which was made. I would like to show you an example of a simple trading strategy which uses two indicators only. This is a simple one hour Forex strategy. The graph shows the principle of work with the EUR USD pair on the hourly time interval. Two indicators are used here. The first one is the Relative Strength Index with a parameter 13, and the second one is a simple moving with a parameter 13 and the shift by three candles. The principle is simple. The most important here is not wait the moment when the RSI shows overbought or oversold levels. Only after this indicator signal you can expect moving signal. This signal indicates a situation when a simple moving average meets the price graph from the bottom with the upward movement and from the top in a downward motion of the price graph. Stop-losses can be placed according to the wish of the trader, but within the last minimum or maximum. This one hour Forex strategy is distinctive because of the fact that, in parallel with standard signals, it often shows divergence - convergence signals. You can add another indicator to this chart, it is better to say another moving. If you add MA with parameters 21 and shift 5 to this chart you will get the opportunity for long orders. Furthermore, this one hour forex strategy gives us another signal that is an intersection of two moving averages, and it provides us with an opportunity to weed out the wrong signal for the closing order.

So, the order is closed not when the price graph meets the MA13, but when the price graph crosses the MA21. However, we should note the nuance of this trading strategy that is a large number of false alarms. To do this, you just need to adjust the parameters of the basic indicator of the trading strategy. The picture shows the Relative Strength Index with the parameter 13. If you set, let’s say, the parameter 21, then the number of indicators’ signals will be reduced significantly, but at the same time the false signals will be reduced as well. In general , the trader decides which parameters to use. Another one hour forex strategy is described further. It is based on a single indicator, which is called Bollinger Bands, or Bollinger Band line. This indicator allows you to work in a sideways motion, and in long positions as well. However, due to its interpretation and changes in the parameters, the Bollinger Bands indicator remains the difficult one for many traders. But here we will explain its signals in a simple way. So, the parameters are: a period 20, shift 3. The rebound from the top and from the bottom line of Bollinger Band is a signal for the orders opening. Thus, the trade is conducted within the channel of price movement. The middle line is used as a simple moving and defines the main trend direction.

Furthermore, two significant signal should be noted. The first one is when the price does beyond the upper or lower Bollinger Bands. This situation indicates that the movement will continue. The second signal is a strong narrowing of the canal. The example is shown on the picture below. In this case, you should pay attention to the situation when the middle line meets the price graph, because it is a strong signal for opening of the order. Thus, using the one hour interval on the Bollinger Bands line you can achieve the high accuracy of the price trend forecast. To draw a conclusion, we can say that the one hour Forex strategy can be made on the basis of almost any indicator, and the combination of any of them can be applied. The most important rule here is a strict adherence to the established strategy, regardless of its components. Source: Dewinforex.



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