4H Crossover (Swing Trading) - MT4/MT5 Resources

EAcpu | 4 reads | 0 comments | 2026-05-03

Update III: Watch the system overview video posted here.

background. December will mark the 5th anniversary of my first Forex trade. I've been a silent participant in Forex Factory for the better part of the past 5 years, so I thought it was time to give back by sharing something I've been working on for quite some time.

I won't pretend to be the best trader on this forum. My trading plan combines a lot of content I've gathered over the years from many people here and elsewhere. Additions, suggestions and positive comments are welcome. Negative, insulting, or otherwise inappropriate comments are best kept to yourself.

Target. Remember; I got into this industry wanting a system I could use to build my retirement. I don't want to trade full time. I'm ready for a 10 year commitment that will far outweigh any retirement account. When building this system, I had the following specific goals in mind:

1. A system that doesn't require me to lose sleep at night (EST) or devote more than 30 minutes a day to administration.
2. A swing trading system with less than 15 transactions per month on 8-12 currency pairs.
3. The system is not heavily affected by the noise of regular economic news releases or weekend price changes.
4. A trading plan that limits maximum drawdowns to no more than 16% and generates annual returns of at least 30%.
5. A trading plan that is easy to explain and easier to execute.

Notes on the system. This system is suitable for swing traders. I trade it because I don't have much time to look at charts. Scalpers might consider changing the rules to a shorter time frame to see if they still work. Keep in mind that this system loses approximately 45% of the time, with an average R:R of 1.34:1. You must be a disciplined trader willing to accept quarterly losses and observe trades that often last weeks or even months. The beauty of this system is that it can operate in most market conditions and be profitable every year, unlike many systems that only operate in specific market circumstances.

General rules. Many of my general trading rules are specific to me and my own trading mojo.

1. All rules are made to be broken. Emotionally, I have to act like a machine, but I also have a brain, so common sense has to prevail in certain situations.
2. 10-15 minutes of fundamental analysis every day.
3. No trading occurs on major U.S. holidays (for no other reason than giving family time off).

Chart settings. (See included default MT4 template)

1. 4 hour candlestick
2. 89 SMA (Close)
3. 21 EMA (Close)
4. A simple custom MACD indicator (HT:MACD 4-hour strategy indicator – download here)
5. Currency pairs: EURUSD, GBPUSD, AUDUSD, USDCAD, EURGBP, EURAUD, EURJPY, GBPJPY, USDJPY, GBPCHF, USDCHF, EURCHF.
6. Optional: MA Cross Alert Indicator (Click Here) - Towards the Darga for sharing.

Money management.

1. The maximum risk per transaction is 1% - 2% of the account balance (depending on risk appetite).
2. The profit target for each transaction is 1% - 2% of the account balance (equal to the maximum risk for each transaction).
3. The minimum capital is US$5,000.
4. Use a broker that allows micro lots (minimum 0.01).
5. The maximum peak-to-trough retracement is 16% (17 consecutive completely losing trades or 25 consecutive average losing trades) ).

Bull entry signal.

1. The 21 EMA breaks above the 89 SMA (21 EMA > 89 SMA), indicating a change in trend from bearish to bullish. This marks "Pending Long Trade"
2. Price climbs, then pulls back (usually back to 21 or 89) and MACD turns red.
3. Enter on the first closing 4-hour candle after MACD turns back to green.
4. Long entry rules:

a. The closing price of the 4-hour entry candle must be greater than the 21 EMA. If not, wait for the next MACD long entry signal (price climbs, the retracement MACD changes from green to red, then climbs again, changing the MACD to green, giving a long entry signal).
b. 21 EMA must be greater than 89 SMA.
c. Only one trade is made per 21/89 crossover.

5. Long entry stop loss 4-10 pips (depending on the currency pair) below the previous big move low (best found on the daily chart). The accompanying chart shows what I mean by "substantial change." This stop loss is usually between 200-400 pips, depending on the currency pair.
6. Long entry take profit is placed at a distance equal to the number of pips as stop loss (for example: 200 pips stop loss = 200 pips TP). Once the TP is triggered, there will be no new entries until the 21/89 short cross.

Short entry signal.

1. The 21 EMA is below the 89 SMA (21 EMA < 89 SMA), indicating a change in trend from bullish to bearish. This marks "Pending Short Trade"
2. Price falls, then pulls back (usually back to 21 or 89), and MACD turns green.
3. Enter on the first closing 4-hour candle after MACD turns back to red.
4. Short entry rules:

a. The closing price of the 4-hour entry candle must be below the 21 EMA. If not, wait for the next MACD short entry signal (price drops, retraces MACD from red to green, then falls again, turning MACD red, giving a short entry signal).
b. 21 EMA must be less than 89 SMA.
c. Only one trade is made per 21/89 crossover.

5. Short entry stop loss is placed 4-10 pips (depending on the currency pair) above the high of the previous big move (best found on the daily chart). The accompanying chart shows what I mean by "substantial change." This stop loss is usually between 200-400 pips, depending on the currency pair.
6. Short entry take profit is placed at a distance equal to the number of pips as stop loss (for example: 200 pips stop loss = 200 pips TP). Once the TP is triggered, there will be no new entry points until the 21/89 long cross.

Close position. If the 21/89 crossover occurs before taking profit or stop loss, close the position at the close of the candle where the crossover occurs. Two-thirds of losing trades are closed this way, rather than hitting the stop, which is why the average winning trade is 1.34 times larger than the average losing trade.

I have provided handouts on systematic trading from January 2009 to October 2010.

Here's what it looked like before the potential entry took place (my chart is from November 25, 2010, before the potential short entry in GBP/JPY).

Update: I've added a link to the trade tracking, lot calculator template spreadsheet I created for this system. Feel free to use this template if you wish. This is the explanation. This is the offline version.

Update Two: Also, here is a link to my online trading log using the spreadsheet if you want to see my progress. I started live demo trading in early September of this year. I plan on going online with real money in or around the first year after a losing streak. My goal is to trade it over the next 10 years. I hope to achieve an average annual return of 48% and build a substantial nest egg over this 10-year period. With compound interest, if I start with $25,000 and hit my goal every year, I will have $1.26 million by the end of the 10 years. If I continue to year 12, the income will be $2.76 million, and in year 15 it will be $8.95 million. It takes ironclad discipline and commitment, but it's worth it.