But in the Forex market, the four-hour time frame takes on special importance. Once again, traders want to look to efficiently buy up-trends when price is cheap, or near support. Check out my trading courses here. In this way, the intraday charts work as an extra point of confluence to give weight to a trade and further confirm whether or not I want to enter it. Leave a Comment Cancel reply Your email address will not be published.
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.
Using Intraday Charts for Second Chance Trade Entries
Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Checkout Nial's Professional Trading Course here. Recent Popular Comments Nial Fuller. Price Action Confluence Trading Strategy. Drawing Support and Resistance on Forex Charts. Inside Bar Forex Trading Tutorial. Price Action Trading Patterns: Can Forex Trading Be Taught?
Exactly Simon, great comparison of costs, this is Great comment John, I agree My understanding is that bankers trade the 1 hour Keletso on About Nial Fuller. I I am a beginner in trading. I need your tutorial Guys if you don't believe Nial about high frequenc Trading IS all about relax and frequency, because Waiting can be a little frustrating for beginners, I don't think the lot size is relevant, the only r When your paying a spread and commission, a tick c 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. 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. 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.
Image taken from 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. 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 minutes can be used at or around the daily close. The total time commitment required is minutes each day, for a total of minutes per week minutes is 4 hours. 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.
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. Traders can use price action to appropriate their entries into these positions. 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 for additional confirmation of the entry by looking to the price action candles that form at or around those swings.
We talk about this a lot at DailyFX, and there is a reason for it: 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. 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.
Using Intraday Charts to Confirm Daily Signals
This will usually be a continuation chart pattern at the same time (on the 4h chart) like a triangle or a channel. On the 1h chart, wait for a breakout with a close of the retracement trendline in the direction of the larger trend (on the 4h timeframe). The best thing about 4 hour Forex charts is the fact that it fits my lifestyle perfectly. 0 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.