When to trade H4

Is it risky to trade H4 charts at the end of the London and New York sessions in case of retracements that happen throughout the asian session or later ie. price going in the opposite direction and hitting your SL?

Price is the same in the 4H, the Monthly or 1 minute chart, what changes when you place a trade in a different timeframe is your risk and reward. The 4H chart is usually use for swing trading, then sessions shouldn’t be a factor in your strategy

I see that the 4H can hang about long enough to be stopped out from such retracements where as 1H and below may have reached TP already

If you are getting stopped out frequently then either you are on the wrong side of the trade or your stop is too tight.

Maybe if you post a image of your charts, I could see better the situation…


On the chart is the sort of scenario I am on about. The signal candle finishes at London 6pm and retraces throughout the New York session stopping me out below 38.2 before going on to hit what was my profit target at 161.8. (The entry was at 61.8). Im not stating this happens very often but just wondering if there is a higher risk trading H4 at this time.

Now… Imagine if instead of you trying to pick a top, you had bought on those dips you sold into.
Why you ask? You have far more up bars than down bars.

What’s the probability that the up move will continue?
Much higher than the probability of you finally getting the top right. There’s only one top and one bottom per swing in price.

BUT, there are many swing lows that turn into continuation moves.
Learn to play along, and you’ll make some money. Try to be a mind reader, and you’ll at best break even, but more likely lose.

Are you stating it is better to watch the chart until the retracement candle forming the swing low has finished and then enter?

I find that setting entry limits at 61.8 works a little more often than not and then the R:R makes it worth it.

It’s a constant balance between a more aggressive, early Entry versus waiting for a bar to close, which gives confirmation but often at the expense of a wider SL or perhaps missing a move altogether. Risk appetite is very personal to each trader, so only you will know which you prefer.

It seems from your last post as though what you are doing works for you already.

In terms of your original, sessions for 240 question, I agree with Yunny1 from earlier in the thread: the 240 is a good swing trading timeframe, and simply represents the same Price that is shown by the other timeframes, just presented slightly differently. I trade a number of different timeframes, including the 240. On the 240 I will enter trades at any time of day, I am simply looking for the right setup. The whole working day is only a couple of bars, after all, so I would not worry about which session is on at the time you are looking to enter a trade. I often enter trade first thing in the morning, late at night or any time during the day, and the time of my Entry has no impact on my R:R. There’s always someone trading, and if I have read the move right then it will get there, if not then it won’t.

You don’t say what your win rate is, but there will always be some losses with any strategy, in my experience, so the odd trade hitting your Stop is just part of the deal, it does not mean that the underlying strategy is flawed.

As Yunny said, if you are being stopped out too often then that would suggest that you are either consistently on the wrong side of the trade, or that your Stop is too tight, unless I am missing something (I didn’t get much from the chart you posted).

ST

I’ve only just started on the 240 charts so haven’t any real win/loss ratio to report. I understand what has been said and will keep going any time of day if the right set up appears. Thanks for the feedback.

I do not see it as riskier as far as stops being hit they can get hit on any time frame. position size and placement of stops are the key.

You should backtest it and find out for yourself. Don’t trust what people tell you…including me. :smiley:

Yes there are many comments on forums that are just to bold and clearly without experience.

I have begun back testing and it is becoming quite obvious that if a we are expecting a retrace on a daily candle or a long run of H1 candles to around 50, then the SL set beyond 38.2 on a H4 can be hit. This seems to be more apparent when the NY session has finsished up until the London session starts.

On 4H charts you shouldn’t need to consider specific trading sessions as much as the overall technicals of the trade.

Just manage your risk accordingly, and set alerts/stops. If you’re right, you’re right.

Price can do whatever it wants whenever it wants. It is not true that price only retrace during Asian session. If it is that easy to spot there wouldn’t be any market at all would it?

Personally I trade on H4 almost exclusively. I find it easy to identify market structure on H4 and Daily and I will take the trade setup as long as it fits my trading plan. I will be more careful taking a trade on Friday because it will likely be left open over the weekend, thus exposing my trade positions to unforeseen weekend news.
But usually I will still take it if it fits my trade setup criteria.

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