Consistent Profitable Trading using 4H O
This is an evolution of my previous topic - 3 Hybrid Systems for Successful Traders...
We use:
1. Weekly Fibonacci Pivot Points by Davit (Added 2 Fibonacci Indicators - Davits Pivot V3.2 for lower timeframes, just to see the pivot areas for the week
Nostromo Pivots works on a 4 hour timeframe, allowing you to view previous, current and future pivots) -
You can download my template in the second post and use it first, then modify it yourself as needed.
2. ADR.
3. TMS Angleator with TDI
4. 30 Exponential Moving Average
5. Breakeven EA
6. Fibonacci Tools
Let's make trading system rules simpler and clearer.
For trend trading-
1. We check the economic calendar for the day and avoid trading currencies with red news on the day before the news is released.
2. But once the red news is announced, we can usually analyze the currency pair one hour later.
3. We look for 4-hour bullish/bearish engulfing candles. The previous candle should be the opposite candle of the engulfing candle. This means that if we buy, we should have a bullish engulfing candle and the previous candle should be a bearish candle. (If not, we can still proceed to step 2)
4. We only start trading from the opening in Frankfurt to the closing in London.
5. If the price is above the 30 EMA and the Angleator values are all +, usually 70 or 50 values, and there are at least 4 upward arrows on different TFs, we buy. When using 4H and 30M TF, the values of the protractor should be positive.
6. If the price is below the 30 EMA, use 4H TF for selling, the Angleator value is usually 70 or 50 value, and there are at least 4 downward arrows on different TFs. Similarly, when using 4H and 30M TF, the values of Angleator should be negative.
7. We draw the Fibonacci tool on the engulfing candle itself and use only 200%, 150%, 100% and 0%. Where 200% is our target, once the price reaches 150% we adjust our stop loss to breakeven, 100% is our entry and 0% is our stop loss.
8. Our Stop Loss and Take Profit can be adjusted accordingly using pivot areas. For TP, we use whichever is closer between the pivot point and 200%. For SL, whichever is further between 0% and the pivot is used. I know the risk reward ratio won't be that great most of the time, but I'd still prefer to have more sure wins and fewer losses. Alternatively, if you don't have a 4H engulfing candle on your entry, we can wait for good price action and only enter when price is close to the pivot area to get a better risk to reward ratio as you can place your stop loss on the other side of the pivot area and then look for the low/high of the last 4H candle you entered and place your target on the next pivot which I am sure has more pip value.
For Counter Trend Trading -
1. Price must be in the 61, 78 and 100 pivot areas before we can consider counter-trend trades. A counter-trend trade is considered if the price is above the 30 EMA and we execute a sell instead of a buy, and vice versa, if the price is below the 30 EMA and we execute a buy instead of a sell.
2. Then we should see bearish/bullish engulfing candles only on the 4-hour time frame.
3. Angleator should also have the same value on 4H and 30M TF. And there should also appear at least 4 arrows pointing in the direction of our trade, which indicates that there is good momentum in the possible direction of our trade.
4. The ADR value should also be higher than 100%, indicating rapid price fluctuations and possible exhaustion later, which is beneficial for our counter-trend trading.
5. We also draw Fibonacci tools, like I mentioned above.
6. The placement of TP and SL is also the same.
Differences from the old hybrid system:
If you must ask, I would say, there are very few differences and modifications, which is why I created this new thread.
1. This new system uses 30 EMA instead of SMA.
2. We no longer trade on the daily timeframe, but of course it is possible to check the daily time just for confirmation of direction.
3. If the price is only in the 61, 78 and 100 areas and if we get 4H engulfing/outside bar . This means that we ignore the 30 EMA direction as long as we get other confluence points such as ADR, Angleator and 4 or more arrows pointing to our possible trade direction.
4. We no longer follow Andre's approach as it is system agnostic.
5. Also, no more multiple orders for a pair like I did on the old system. Strictly speaking, only one order can be placed per pair to avoid greed.
Nonetheless, I would like to thank two traders who gave me some ideas for completing this system:
Davit - Pivot Transaction
Hertz 10 – Simple H4 mobile trading system
If you have a telegram. You can also join this room created by one of our traders who will send notifications every time an engulfing candle forms so you are instantly aware of possible trade setups...
https://t.me/joinchat/Ac3F5hWfPkZx9qYWIAotuw
Credits: Beater Trader for his efforts...
We use:
1. Weekly Fibonacci Pivot Points by Davit (Added 2 Fibonacci Indicators - Davits Pivot V3.2 for lower timeframes, just to see the pivot areas for the week
Nostromo Pivots works on a 4 hour timeframe, allowing you to view previous, current and future pivots) -
You can download my template in the second post and use it first, then modify it yourself as needed.
2. ADR.
3. TMS Angleator with TDI
4. 30 Exponential Moving Average
5. Breakeven EA
6. Fibonacci Tools
Let's make trading system rules simpler and clearer.
For trend trading-
1. We check the economic calendar for the day and avoid trading currencies with red news on the day before the news is released.
2. But once the red news is announced, we can usually analyze the currency pair one hour later.
3. We look for 4-hour bullish/bearish engulfing candles. The previous candle should be the opposite candle of the engulfing candle. This means that if we buy, we should have a bullish engulfing candle and the previous candle should be a bearish candle. (If not, we can still proceed to step 2)
4. We only start trading from the opening in Frankfurt to the closing in London.
5. If the price is above the 30 EMA and the Angleator values are all +, usually 70 or 50 values, and there are at least 4 upward arrows on different TFs, we buy. When using 4H and 30M TF, the values of the protractor should be positive.
6. If the price is below the 30 EMA, use 4H TF for selling, the Angleator value is usually 70 or 50 value, and there are at least 4 downward arrows on different TFs. Similarly, when using 4H and 30M TF, the values of Angleator should be negative.
7. We draw the Fibonacci tool on the engulfing candle itself and use only 200%, 150%, 100% and 0%. Where 200% is our target, once the price reaches 150% we adjust our stop loss to breakeven, 100% is our entry and 0% is our stop loss.
8. Our Stop Loss and Take Profit can be adjusted accordingly using pivot areas. For TP, we use whichever is closer between the pivot point and 200%. For SL, whichever is further between 0% and the pivot is used. I know the risk reward ratio won't be that great most of the time, but I'd still prefer to have more sure wins and fewer losses. Alternatively, if you don't have a 4H engulfing candle on your entry, we can wait for good price action and only enter when price is close to the pivot area to get a better risk to reward ratio as you can place your stop loss on the other side of the pivot area and then look for the low/high of the last 4H candle you entered and place your target on the next pivot which I am sure has more pip value.
For Counter Trend Trading -
1. Price must be in the 61, 78 and 100 pivot areas before we can consider counter-trend trades. A counter-trend trade is considered if the price is above the 30 EMA and we execute a sell instead of a buy, and vice versa, if the price is below the 30 EMA and we execute a buy instead of a sell.
2. Then we should see bearish/bullish engulfing candles only on the 4-hour time frame.
3. Angleator should also have the same value on 4H and 30M TF. And there should also appear at least 4 arrows pointing in the direction of our trade, which indicates that there is good momentum in the possible direction of our trade.
4. The ADR value should also be higher than 100%, indicating rapid price fluctuations and possible exhaustion later, which is beneficial for our counter-trend trading.
5. We also draw Fibonacci tools, like I mentioned above.
6. The placement of TP and SL is also the same.
Differences from the old hybrid system:
If you must ask, I would say, there are very few differences and modifications, which is why I created this new thread.
1. This new system uses 30 EMA instead of SMA.
2. We no longer trade on the daily timeframe, but of course it is possible to check the daily time just for confirmation of direction.
3. If the price is only in the 61, 78 and 100 areas and if we get 4H engulfing/outside bar . This means that we ignore the 30 EMA direction as long as we get other confluence points such as ADR, Angleator and 4 or more arrows pointing to our possible trade direction.
4. We no longer follow Andre's approach as it is system agnostic.
5. Also, no more multiple orders for a pair like I did on the old system. Strictly speaking, only one order can be placed per pair to avoid greed.
Nonetheless, I would like to thank two traders who gave me some ideas for completing this system:
Davit - Pivot Transaction
Hertz 10 – Simple H4 mobile trading system
If you have a telegram. You can also join this room created by one of our traders who will send notifications every time an engulfing candle forms so you are instantly aware of possible trade setups...
https://t.me/joinchat/Ac3F5hWfPkZx9qYWIAotuw
Credits: Beater Trader for his efforts...
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