Friday, March 15, 2019

Forex Strategy That Works In The 4 Hour Time Frame

Slowly but surely my capital every week increases. 

But that’s only possible through dedication and discipline in following my forex trading strategy that works in the 4 hour time frame.
 It’s better like that because I avoid over trading.

  Overtrading is one of the reasons why most of the traders fail.


My defense is my best offense in the market.

Trading only on a minimum of once a week not only keeps me away from overtrading, it also gives me control over my emotion towards the market.

Don’t be afraid of missing out opportunities because the market is not going anywhere.

Stick to your strategy and patiently wait for your trading set ups to arise before you take an entry

Just like what I’m doing, I patiently wait and wait and wait for my set ups to occur before I decide to join in.

Enough said, let’s go on now to my 1:3 risk-to-reward winning trade in NZDCHF.


Using the same forex trading strategy in the 4 hour time frame consistently



I just want to say that I am literally using the same strategy over and over again in the market. Same set up, same plan, same risk to reward ratio set up, everything the same. Only that it varies on the forex currency pair that I trade on.

 Plotting support or resistance key areas


This is the first thing that I always do with the charts in the 4 hour time frame. I plot key support and resistance and wait for the price to make a move on those areas. This support or resistance key areas may be a horizontal line or in this case in NZDCHF  a support trend line as shown below.

key support and resistance
click the image to zoom in

Japanese candle Stick Formations Setup



The second thing I do then is to look for or sometimes wait for Japanese candle stick set ups to form in this key support or resistance area that I plot.

Using my own strategy, I need to wait for a combination of engulfing candles and/or pin bars.

In short my set up candles are engulfing candles and pin bars, but note that I said also that this candle stick formations needs to be formed right at a KEY AREA.

I don’t just randomly trade engulfing candles and pin bars, it needs to be formed in a key area as well.

And if we look at the image below, there are three bullish engulfing candles formed right at the trend line support that I plotted.

bullish engulfing candles
click the image to zoom in


Planning for the risk-to-reward ratio


  • Entry Point - This combination of three engulfing candles that are formed right at the support is my final clue for an entry trade. Of course you can wait for a little bit of pullback but in my case here I put an entry immediately upon seeing this 3rd bullish engulfing formed.

  • Logical Stop Loss Point - My stop loss placement is right below those bullish engulfing candles and the support line. I needed to widen my stop loss so that I can give some space for the price to move in and out. Also, it is much safer down below that area because buyers are positioned there to reject the price.

  • Profit target placement- As you may see in the image below, there is a clear previous resistance that formed.Since this bullish trade set up looks so strong with the presence of the support trend line and 3 bullish engulfing candles, I will place my profit target right at the resistance zone.

The final trade set up would then look like this below.

final trade set up
click the image to zoom in

Forex psychological stage a.k.a the waiting stage



Entry point, stop loss and profit target all secured. I evaluated the trade set up and I perfectly followed my forex trading strategy 100%.

My plan and strategy is already fixed and constant. The only problem now is my own psychology and emotion towards my trade.

That is why I set my trade and walk away from it. Not only that I avoid stressing about it but also I kept myself from interfering from it.

I will have no regrets if this turns out to be a losing trade because I followed my plan, I followed my strategy, 
I followed my system. I also accepted the fact that my strategy is not a 100% win rate and so I will have losses.


 BUT GUESS WHAT HAPPENS WHEN PREPARATION MEETS OPPORTUNITY? 


when preparation meets opportunity
click the image to zoom in

Yes, my profit target was hit and I gained 3% profits.

After almost 3 trading days the price finally reached out for my profit target.

Every time I have a winning trade like this it makes me more confident and trusting more on my trading strategy.

I managed to make an actual video of this trade here in my YouTube Channel. If you like you can watch this live video right here : https://www.youtube.com/watch?v=d6fMJ40uGxY

You can subscribe to my channel and browse my videos and you will see how my strategy evolved  from just a simple set up to up until to what it is now.


More power to you!

1 comment:

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