Trading 4hr or greater

Hi, I’m all wet, total newbie, I’ve found pipsology a great resource. I’m demoing an account and have found reasonable success trading 15 min charts but I’m having a terrible time on larger. I’d like to use 4hr or greater so I’m not glued to the computer full-time. I’m identifying trends and trading with them but keep getting whipsawed out. How do you trade big trends on forex with it’s minute by minute volatility? It seems the stops need to be so big they’re useless.

Cheers,
Pipeter

that’s the key though. When you trade larger time frames you need larger stops. I trade the 4 hr charts and most of my stop losses are 50+ pips. You have to define your stop loss by market conditions not how much you can afford to lose.

I usually use last swing high/low. So figure out how much you wanna risk, and apply that to your lot size and stop loss. If you have less capital then that means your lot size will be much lower than say on a 15 min chart, but you’re profit target will be much farther away then on a smaller time frame.

Ok to answer myself I’m trying a less volatile pair and have disabled the impulse buy/sell button and will stick with position orders for now and see where this goes…

Thanks for looking :–

Thanks, Virtecs, yes I see you need good funding and a strong stomach. Thanks for the help.

Cheers,
Pipeter

I’ve just started trading the daily charts using a variation of this system here:

http://forums.babypips.com/free-forex-trading-systems/20496-forexphantom-daily-crossover-system.html

It’s the best one I’ve tried so far in terms of results. It does need a bit of patience though. If I had more time I’d use the 1H and 15 minute charts to set up the actual entry points for maximum pips

I set 100 pip trailling stops and set my take profit on fibonacci retracement levels depending on the strength of the trend.

In my first month of demo trading I’ve gone form trading the 15 minute charts for 30-40 pip trades, then to 1 hour charts for 50-60 pip trades (both using the 4h chart for the trend) and now the daily charts for 150+ pip trades.

As I have a 9-5 swing trading makes more sense for me. Although I like to monitor them for retracements and when to take profit depending on the strength of the move.

Now I’m incorporating looking for divergances and preparing for upcoming news events - which as I learnt on Thursday - can wipe out profitable positions with 100 pip stops on them… :rolleyes:

Happy trading!

How? Time your entry better. :wink:

I’m the opposite, I never had really great success on 15minute charts, I would overtrade and spend a lot of time just looking at charts. With 4hr charts you have to set big stop because you’re trading big moves.

Thanks for the suggestions, folks. BTW the entries aren’t the problem it’s the premature exits. ;- I’ll post back once I get some results.

Well I’ve given up on MA crossovers as I keep missing the party. At the moment I’m having great success on 2-hr chart setups with stochastics and RSI. I can still set modest profit targets and walk away, and close out my trades on the weekend. And it seems you can find tradeable setups almost anytime you login, you’re not waiting for the elusive mother ship.

Thanks, feel free to comment. Cheers.

Glad you’re having great success.

Regarding MA crossovers, what I do is go though the charts and note down the ‘ones to watch’ then monitor in the morning and evening throughout the week until they either cross or don’t cross.

It helps to know which ones to look out for and when to check them - especially when trading the daily charts!

I’ve found you can wind up with big losses if they don’t pan out though. I found a textbook MA entry using the pipsology “so easy it’s ridiculous” trading system (modified the trailing stop though, on what day chart does a 30 pip stop work?) I entered and the trade just went sideways for 3 days despite the indicators showing strength. I bailed 5 days in with a sizable loss. The size of the good trades I’m sure more than makes up for this behavior, but I realize this style doesn’t suit me. I need something more hands on, smaller profits I know but more control. Happy trading though on whatever system…!

p

When I sit down to trade, I am trading currency. I am not trading charts. Though it may sound ridiculously obvious, that fact seems to be forgotten by most traders and is part of the reason most traders lose money.

Good point. Money management needs to be the basis. Trading charts is of course a figure of speech to help communicate a strategy.

Without an advanced understanding of support and resistance in the marketplace, I don’t see how anyone could profit for very long. You need a good support/resistance level to structure your risk/reward setup around.

This is how I set my stops and limit orders now - just put one on with a 200 pip stop loss because that’s where the resistance line is + about 20 pips, the limit order is set at around 450 pips which is within my 2:1 risk/reward ratio.

It helps to know which markets are trending and which are ranging from side to side. My project for this weekend is to create a spreadsheet that monitors currency pairs and grades them accordingly to whether they are trending or ranging.

The template is in Kathy Lien’s “Day trading and Swing Trading the Currency Market” (page 94) if anyone’s interested.