January 6, 2010
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 GBP/USD 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.
Free Forex Trading System That Requires Only 30 Minutes A Day To Make Profits
There are many forex trading systems that can generate profit. Some of them are complicated requiring many indicators, oscilators or advanced tools. But forex trading can be very simple and all you need is learn how to read charts and price action properly.
I am going to share with you one free forex trading system that is very simple but powerful and profitable. You do not need any indicators. If you can identify main trend and be patient enough to wait for a high probability set ups you are well on your way to steady profits.
This free forex trading system requires only about 30 minutes of your time daily. Use 4 hour charts. The beauty of this strategy is that you do not have to watch charts all day long. Only open your platform every 4 hours when a new candle is open. Check your favorite pairs. If there is a setup ( explained below) you simply enter a trade, but if there is no setup just close your charts, do something else and come back after 4 hours. With this strategy you will not be opening a lot of trades. Sometimes there will be days without trading. There may be weeks when you open 1 or 2 trades only. But it is enough to make nice profits because you will wait for high probability trades and so your winning ratio will be higher. You have to treat your forex trading as if you were an army sniper. He waits patiently for his target to appear and once that happens sniper strikes knowing he can successfully accomplish his mission.
1) Identify main trend
You should be always looking to trade with a main trend. As you can see downtrend on the screenshot above. You can see that the price clearly goes down.
2) Wait for a retrace
As you can see, altough there is a downtrend, the price doesn?t go down on a straight line. Sometimes it jumps back up and then goes down again. That is called a retracement and it is what we are looking for.
3) Enter Your Trade
On the screenshot you can see a red arrow. It points to a place where it is best to enter your sell position. It is on top of retracement where the price starts to go down again. In this example you can see a long bullish candle and after that a small white (bearish) candle. It is a sign that the retrace could be over and that there is a high probability that downtrend will continue. So open your trade, set your stoploss few pips above white candle and set your target profit at least twice the size of your stoploss. This way you will have 1 to 2 risk/reward ratio. Of course some of your trades will be losers, but you have a high probability setup with a direction of the main trend and proper 1 to 2 risk/reward ratio. That means this free forex trading system will only need 40% winning ratio to be profitable. So even if 6 out of 10 trades would be losers you will make profit.
So now it?s a time to Open Demo Or Live Trading Account and test this strategy.
I hope you like this free forex trading system. It is easy, simple and does not require a lot of your time. But if you would like to put your forex trading completely on autopilot you can autocopy some successful forex traders on largest social investment networks eToro or Zulutrade.
Profitable Forex Strategy Using 4 Hour Charts
Hereís my profitable Forex strategy that I use consistently. I found this from a forum years ago with great documentation and simply applied it. Itís probably one of the most effective strategies around in my opinion and itís completely documented with PDFís
Before I explain this, thereís a 20 page PDF you can download below that will explain in detail on how to analyze the trends.
Iíve been trading Forex now for almost 5 years and believe me Iíve had my fair share of ups and downs. Iíve tried many systems, indicators, robots and managed accounts. Itís 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 Iíve 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 EUR/USD pair. I love this pair b/c it doesnít move too fast, it trends consistently and it seems to be the most predictable. Not to mention over the years Iíve noticed this pair seems to bounce off of .80 and .30 a lot. For example, thereís 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. Iíve attached a PDF below that details how I trade this setup step by step. I must say itís extremely effective and it does take some practice.
Download The Ebook Download Now
ď1 Hour ForexĒ Trading System
every now and then someone develops something that is worth our attention. It happens very rarely lately but it still happens.
If this thing is also developed by someone I personally know then itís something giving even more trust to the whole package.
The ď1 Hour ForexĒ is a manual trading system applied to the 1 hour timeframe (thatís where the name comes from). A simple and effective one.
All you have to do is download the pdf manual and spend less than two hours watching all the 8 videos to learn in depth how the trading system works and what you can expect from it. My friend Jason also developed a couple of indicators to apply to your charts that will make the thing even easier.
The average numbers of pips per trade with 1 Hour Forex is between 15 Ė 30 pips, sometimes higher. But, letís use the pessimistic scenario of 15 Ė 30 pips with more than 90% results, considering the fact that you need no more than 45 minutes to spend in order to decide if a potential trade set up may occur, I have no doubt it will be your most profitable stress-free 45 minutes!
Remember, to be profitable you need consistency and trust in your trading system. Even 15-30 pips a day can be more than enough if youíll have a high percentage of doing them. Thatís one of the main reasons I particularly love the ď1 Hour ForexĒ trading system.
If you want to read more and keep informed about the coming release of the system simply click here.
Winner: July Best Forex Trading System of the Month
After a brutal week-long one-on-one battle, a winner has emerged.
Ladies, gentlemen, monsters, and robots, letís give it up for NickB, the winner of Julyís Best Forex Trading System!
His trading system, the 4H Scalping Method, is an oldie but it sure is a goodie. Over the years, it has developed quite a following in the BabyPips.com community.
Making use of the 4-hour time frame, the 4H Scalping Method is what we call a ďnakedĒ trading system as it doesnít use a single indicator. Thatís right, earthlings! You wonít see any moving averages and oscillators on NickBís charts. His system bases trades solely on price action, relying on trend lines for entry and exit signals.
Does that sound interesting to you? Then you might want to read more about his system in the 4H Scalping Method forum thread!
As the winner of Julyís contest, the NickB 4H Scalping Method will receive the following:
- A spot at the Best Forex Trading System (BFTS) Hall of Fame in the forum
- A badge at the front page of BabyPips.com that will displayed for the entire month of August.
- On NickBís behalf, we will donate $50 to one of the charities in the BabyPips.com Golden List of Charities.
- And lastly, I will also mechanize it and backtest his system to see how it fares against the Robopip Standard for Mechanical Systems. But after reading through the rules of the system, I found out that this is highly discretionary. As such, Iíll have to thoroughly learn the system first and see whether I can indeed mechanize it. Stay tuned!
With Julyís contest over, itís time to announce Augustís Best Forex Trading System Contest open. Head on over to our forums and submit your entries for a chance to win the rewards I have just mentioned above for yourself. Just make sure you follow the official rules and regulations to be qualified. Good luck, humans!