Forex for a trader
Trading 4 hour charts forex

Trading 4 hour charts forexThe 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. 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. Trading the 4 hour chart time frame with the daily chart trend. August 13, 2014 in School. Trading the 4 hour chart time frame with the daily chart trend. The best way for beginner’s to learn how to trade the 4 hour chart, or any lower time frame, is to look at the next time frame above it, and trade it along with that time frame. We are basically looking for two things on the daily chart: The trend (if there is one) and the key levels.

After identifying the daily chart trend and drawing in the key daily chart support resistance levels. We will check out the 4hr chart and look for any obvious price action setups. We are looking for an obvious price action setup that is signaling a potential move in the direction of the daily chart trend and(or) that has formed from a key daily chart support or resistance level. Below, we see an example of trading the 4 hour GBPUSD chart with the daily GBPUSD chart trend. Note that we had a clear downtrend commence on the GBPUSD daily chart starting around September 1 st of 2011. At that point we would ONLY be focused on price action sell signals on the 4 hour chart time frame. As we can see, there were at least 3 very solid pin bar setups that formed on the 4 hour chart in the context of this daily chart down trend before it reversed: Daily Chart : 4 hours chart : Note that when taking a 4 hour setup in the context of a daily chart trend like this, you can typically get a very very good risk to reward ratio. You have the higher time frame daily chart trend on your side, and then you get the advantage of employing a tighter stop loss by looking for a signal on the 4 hour chart. Once you get this process down you can find some very lucrative trade setups.

However, don’t think that this will continue as you move down in time frame, because once you get below the 1 hour the charts get very hard to trade and have many false-signals, so the tighter stop potential is more than offset by the false-signals generated by the market noise of time frames under the 1 hour. This inter-play between the 4 hour and daily is something I highly recommend all of you try to get down. Use the daily chart as your guide, and when you see a strong trend setting up on it, drill down to the 4hr and look for obvious and well-defined PA setups in the direction of the daily chart trend. The great thing about trading 4 hour Forex charts. In my opinion nothing beats 4 hour Forex charts , you may be wondering why I would make such a claim. Is it something to do with some ‘esoteric secret?’ or maybe ‘The World’s top traders are doing it?’, maybe it is ‘Some secret ploy to sell you my latest product that relies on a 4 hour chart?’ The reason why I believe the 4 hour Forex chart is the best time frame ever is basically just to do with my lifestyle, how I personally trade and how I create time for trading in my life. I lead a pretty hectic life, with running the Dynamite Indicators, looking after my partner and raising my beautiful little girl, there is always 101 things to do each day. Trying to fit trading into my life in the past was sometimes difficult, especially when trying to keep the important people in my life happy but with a four hour chart I manage it. For some people trading may seem like a daunting idea, especially if you already have a fulltime job and you are not in a position financially to give it all up to become the ultimate day trader. If all this sounds far too familiar then keep reading to learn why I claim that the 4 hour chart is best chart out there.

Trading can be very time consuming, lots of people choose to try and trade daily charts or even weekly charts. But this can feel like you are waiting forever for charts to line up. You may have to wait days or even weeks between moves, this will just add to your frustration. My average Day to Day Schedule using 4 hour Forex charts. The best thing about the 4 hour forex currency charts, is the fact that it fits my lifestyle perfectly. This is how my trading works on a day to day basis and the reason why more recently I have started to trade Forex over Stocks using a 4 hour chart, I do still keep my eye on a few stocks and for that I use a daily time frame. 07:00 am: I wake up, I switch on my trading computer and load up TradeStation. I check all of my open positions and spend approximately 10 minutes seeing what the markets are up to. 07:30 am: I shower and get ready for work, some days I even hit the gym first. I check my twitter and news feed on the way to the office, this gives me an idea of the general market news for the day and what people are talking about. 09:30 am: I get to my desk about 9:30am. I check my charts and start to look at the hundreds of emails I receive each day, I start working on my various projects. 01:00 pm: I take lunch and get back to my desk for 2:00pm.

02:00 pm: Naturally I check my charts again. This is the same process all day, I manage my stops and positions, I look to see what is setting up and I enter any trades that meet my entry criteria. I carry on working on my projects for the rest of the afternoon. 05:30 pm: I start wrapping things up for the day, and you guessed it… I check the charts just before I leave work, by the time I get home and have some dinner, see my daughter and partner it will be coming up to 8:00pm. 08:00 pm: I spend a good hour doing some research and analysis, looking at new ideas and looking to see what is lining up for the next trading day. I check all of my positions and then I try to relax for the rest of the evening. I take one last glance just before bed which is usually around about 11pm. So you can see how with 4 hour Forex charts I literally never miss a bar. I prefer the 4 hour chart because it is so much faster than a daily chart. Best of all I can live my life without being glued to the charts 247. I literally see each bar as the day progresses. It allows me to open and close my positions when the opportunity to enter or exit arises and I still manage to get everything else done too. If my life-style sounds a little bit like your life-style and you’re wondering how an earth you can squeeze trading time into your already busy schedule then have a look at the 4 hour chart and see if it can work for you too. If you use 4 hour Forex charts , post me a comment I would love to hear from you. 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. 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. A Personal Trading Strategy. 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 Richard Krivo. 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. While I occasionally trade from the Daily chart, primarily I use it to determine the trend of the pair. Once I have identified the pair that I feel has the strongest trend based on the Daily chart, I will usually enter on a 4 hour or 1 hour chart. whichever time frame best optimizes my entry. Here's what I am looking for chart by chart . The Daily Chart: The Daily Trend on the NZDJPY is down . This determination is made based on the pair making lower highs and lower lows, price action is below the 200 SMA and pulling away from it and, at the time of the analysis, the NZD was the weakest currency and the JPY was the strongest . Also, looking at Slow Stochastics , I see that it is below 20 which is a very bearish sign. Given all of th e above , I know I will only be looking for opportunities to sell the pair as they will have the greater likelihood of success. (Trading in the direction of the longer term trend offers us that edge.) The 4 Hour Chart: Then I will look to the 4 hour chart and look for a retracement (a move against the Daily trend) to be finishing and beginning a new move to the downside .

In other words, a fresh move back in the direction of the Daily trend. Sometimes that fresh move will prese nt itself straightaway or I may have to wait for the set up to occur. In the case of this particular 4 hour chart I would need to wait for the pair to cycle back up as a new move to the downside has already taken place over the last five red candles on the far right of the chart. I will also run through this same process on the one hour chart looking for the same set up. Once a “ fresh move ” begins on either the 4 hour or the 1 hour chart , an entry can be made with a stop placed above the highest level of the recent retracement. (Stochastics, MACD or RSI can be used to further time the entry.) The 1 Hour Chart: In the case of this 1 hour chart, I would be waiting for a pullbackretracement to take place to short the pair. Since the pair has been in a strong, on-going downtrend on the Daily chart, I would have been able to successfully sell the pair at any of the points on the chart after the retracement (black arrows) takes place. The short position would be opened when momentum shifts back to the downside (Stochastics crossover within the black circles). In each instance the stop would go above the most recent high approximately at the black lines. Sidebar: Some traders will become frustrated when they see price is moving opposite the direction of the Daily trend.

Don’t worry about it. It is fine since that means a retracement is taking place and once that is complete, we will be looking at an opportunity to enter the trade in our direction of choice. the direction of the Daily trend. DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. 4 Hour Forex Trading System - My Exact Set-Up. The only drawback to running a forex blog is that you are constantly being bombarded with lots of questions, and some of the most common questions I receive relate to my 4 hour trading system. So in this first post of 2010 I thought I would share with you my exact trading set-up. You can find out how I trade this 4 hour system by subscribing to my newsletter if you haven't already done so (simply fill in the form to the right) but I just want to show you what my everyday chart looks like. I use very few technical indicators, and they are basically as follows: - EMA (5) - EMA (20) - EMA (50) - EMA (200) - Supertrend (3,10) - Smoothed Repulse (5) The 50 and 200 period EMAs are just there for guidance really, both for determining the long-term trend and for highlighting areas of support and resistance in some instances, and the Supertrend is just used on the daily chart to tell me which way I should be trading. My typical 4 hour chart looks like the one below, although on this time frame I'm only really interested in the 5 and 20 period EMAs and the Smoothed Repulse indicator. (The other indicators are only on there because I often toggle between the 4 hour and the daily chart). The main signal comes when the EMAs cross over, and the best signals occur when this event coincides with the Smoothed Repulse crossing through 0 in the same direction. This is exactly what happened yesterday on the GBPUSD pair, as you can see from the chart below. The Smoothed Repulse indicator isn't an essential aspect of this system. You can simply trade the EMA crossovers if you so wish. However it does help you pinpoint the very best set-ups. Anyway I hope this answers any questions you may have, and I wish you a Happy New Year. Trading the 4 hour chart time frame with the daily chart trend. August 13, 2014 in School.

Trading the 4 hour chart time frame with the daily chart trend. The best way for beginner’s to learn how to trade the 4 hour chart, or any lower time frame, is to look at the next time frame above it, and trade it along with that time frame. We are basically looking for two things on the daily chart: The trend (if there is one) and the key levels. After identifying the daily chart trend and drawing in the key daily chart support resistance levels. We will check out the 4hr chart and look for any obvious price action setups. We are looking for an obvious price action setup that is signaling a potential move in the direction of the daily chart trend and(or) that has formed from a key daily chart support or resistance level. Below, we see an example of trading the 4 hour GBPUSD chart with the daily GBPUSD chart trend. Note that we had a clear downtrend commence on the GBPUSD daily chart starting around September 1 st of 2011. At that point we would ONLY be focused on price action sell signals on the 4 hour chart time frame. As we can see, there were at least 3 very solid pin bar setups that formed on the 4 hour chart in the context of this daily chart down trend before it reversed: Daily Chart : 4 hours chart : Note that when taking a 4 hour setup in the context of a daily chart trend like this, you can typically get a very very good risk to reward ratio.

You have the higher time frame daily chart trend on your side, and then you get the advantage of employing a tighter stop loss by looking for a signal on the 4 hour chart. Once you get this process down you can find some very lucrative trade setups. However, don’t think that this will continue as you move down in time frame, because once you get below the 1 hour the charts get very hard to trade and have many false-signals, so the tighter stop potential is more than offset by the false-signals generated by the market noise of time frames under the 1 hour. This inter-play between the 4 hour and daily is something I highly recommend all of you try to get down. Use the daily chart as your guide, and when you see a strong trend setting up on it, drill down to the 4hr and look for obvious and well-defined PA setups in the direction of the daily chart trend. Trading the 4 hour chart time frame with the daily chart trend. August 13, 2014 in School. Trading the 4 hour chart time frame with the daily chart trend. The best way for beginner’s to learn how to trade the 4 hour chart, or any lower time frame, is to look at the next time frame above it, and trade it along with that time frame. We are basically looking for two things on the daily chart: The trend (if there is one) and the key levels. After identifying the daily chart trend and drawing in the key daily chart support resistance levels. We will check out the 4hr chart and look for any obvious price action setups.

We are looking for an obvious price action setup that is signaling a potential move in the direction of the daily chart trend and(or) that has formed from a key daily chart support or resistance level. Below, we see an example of trading the 4 hour GBPUSD chart with the daily GBPUSD chart trend. Note that we had a clear downtrend commence on the GBPUSD daily chart starting around September 1 st of 2011. At that point we would ONLY be focused on price action sell signals on the 4 hour chart time frame. As we can see, there were at least 3 very solid pin bar setups that formed on the 4 hour chart in the context of this daily chart down trend before it reversed: Daily Chart : 4 hours chart : Note that when taking a 4 hour setup in the context of a daily chart trend like this, you can typically get a very very good risk to reward ratio. You have the higher time frame daily chart trend on your side, and then you get the advantage of employing a tighter stop loss by looking for a signal on the 4 hour chart. Once you get this process down you can find some very lucrative trade setups. However, don’t think that this will continue as you move down in time frame, because once you get below the 1 hour the charts get very hard to trade and have many false-signals, so the tighter stop potential is more than offset by the false-signals generated by the market noise of time frames under the 1 hour. This inter-play between the 4 hour and daily is something I highly recommend all of you try to get down. Use the daily chart as your guide, and when you see a strong trend setting up on it, drill down to the 4hr and look for obvious and well-defined PA setups in the direction of the daily chart trend.



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