Simple 4 hour forex strategy

Most profitable Forex trading strategies

---

Although the RSI is an effective tool, it is always better to combine the RSI with other technical indicators to validate trading decisions. The strategies we will cover in the next section of this article will show you how to reduce the number of false signals so prevalent in the market. We will close our position if either indicator provides an exit signal. This is the minute chart of IBM.

In this relative strength index example, the green circles show the moments where we receive entry signals from both indicators and the red circles denote our exit points. A bit more than an hour after the morning open, we notice the relative strength index leaving an oversold condition, which is a clear buy signal. The next period, we see the MACD perform a bullish crossover — our second signal. Since we have two matching signals from the indicators, we go long with IBM. We appear to be at the beginning of a steady bullish trend.

Five hours later, we see the RSI entering oversold territory just for a moment. Since our strategy only needs one sell signal, we close the trade based on the RSI oversold reading. In this trading strategy, we will match the RSI with the moving average cross indicator. For the moving averages, we will use the 4-period and period MAs. We will buy or sell the stock when we match an RSI overbought or oversold signal with a supportive crossover of the moving averages. We will hold the position until we get the opposite signal from one of the two indicators or divergence on the chart.

Also, I want to clarify something about the MA cross exit signals. A regular crossover from the moving average is not enough to exit a trade.

Selected media actions

I recommend waiting for a candle to close beyond both lines of the moving average cross before exiting the market. To illustrate this trading strategy, please have a look at the chart below:. RSI enters the oversold area with the bearish gap the morning of Aug Two hours later, the RSI line exits the oversold territory generating a buy signal. An hour and a half later, the MA has a bullish cross, giving us a second long signal.

Furthermore, this happens in the overbought area of the RSI. This is a very strong exit signal, and we immediately close our long trade. This is a clear example of how we can attain an extra signal from the RSI by using divergence as an exit signal. Now I will show you how to combine the relative strength index with the relative vigor index. In this setup, I will enter the market only when I have matching signals from both indicators. I will hold the position until I get an opposite signal from one of the tools — pretty straightforward.

First, we get an overbought signal from the RSI. Then the RSI line breaks to the downside, giving us the first short signal. Two periods later, the RVI lines have a bearish cross.

Multiple Time Frames Can Multiply Returns

This is the second bearish signal we need and we short Facebook, at which point the stock begins to drop. After a slight counter move, the RVI lines have a bullish cross, which is highlighted in the second red circle and we close our short position.

This trade generated a profit of 77 cents per share for a little over 2 hours of work. Facebook then starts a new bearish move slightly after 2 pm on the 21 st. Unfortunately, the two indicators are not saying the same thing, so we stay out of the market. Later the RSI enters the oversold territory. A few periods later, the RSI generates a bullish signal. After two periods, the RVI lines also have a bullish cross, which is our second signal and we take a long position in Facebook.

Just an hour later, the price starts to trend upwards. Notice that during the price increase, the RVI lines attempt a bearish crossover, which is represented with the two blue dots. Fortunately, these attempts are unsuccessful, and we stay with our long trade. Later the RVI finally has a bearish cross, and we close our trade. Here I will use the RSI overbought and oversold signal in combination with any price action indication, such as candlesticks, chart patterns , trend lines, channels, etc.

To enter a trade, I will need an RSI signal plus a price action signal — candle pattern, chart pattern or breakout. I will hold every trade until I get a contrary RSI signal or price movement that the move is over. The chart image starts with the RSI in overbought territory. After an uptrend, the BAC chart draws the famous three inside down candle pattern, which has a strong bearish potential.

With the confirmation of the pattern, we see the RSI also breaking down through the overbought area.

We match two bearish signals, and we short BAC. The price starts a slight increase afterward. This puts us into a situation, where we wonder if we should close the trade or not. Fortunately, we spot a hanging man candle, which has a bearish context. We hold our trade and the price drops again. Look at the three blue dots on the image. These simple dots are enough to build our downtrend line.

Signals of the trading system

After we entered the market on an RSI signal and a candle pattern, we now have an established bearish trend to follow! The trend resists the price yellow circle , and we see another drop in our favor. After this decrease, BAC breaks the bearish trend, which gives us an exit signal.

If I am already in the market, I will look to adjust my stop-loss to protect any profits and have my target in place as a news release can often act as a catalyst to completing a measured move or moving to significant support or resistance levels. It may seem like simple forex trading strategies are easy. The reality of trading is that you need to show up each day and be prepared. Do your homework. Draw significant support and resistance lines on your charts. The Candlestick Trading Bible.

I hope you enjoyed this post! Did This Help You? If so, I would greatly appreciate it if you commented below and shared on Facebook. Email: support staceyburketrading. Welcome to our website. If you continue to browse and use this website, you are agreeing to comply with and be bound by the following disclaimer , together with our Terms and Conditions. This website is for general informational purposes only and nothing contained on it is or is intended to be construed as advice.

It does not take into account your individual objectives, investment objectives, financial situation or needs. Such a trading system can be recommended for traders who have accumulated a certain experience in the financial market, for which the main thing is not the excitement and number of deals, but profitability and the absence of risk. Great content Coach — thank you for sharing your extensive knowledge. I have never tried trading the higher time frames as I always think the stops have to be too big.

I will be re-watching this very soon. That is some pretty solid content Coach, thanks. All the systems and indicators I have used have failed me. I will give feedback after some time, Wish me luck. Save my name, email, and website in this browser for the next time I comment.

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies.

It is mandatory to procure user consent prior to running these cookies on your website. Indicator settings The standard indicator RSI Relative Strength Index about oscillators should be set on the schedule of the required asset. The RSI period is set to 14 — it is usually set by default, plus an additional layer 50 is added in the Levels tab of the indicator setting window, in the screenshot, the level style is set in bright green for better readability: Next on the graph are an exponential moving average EMA with a period of and a simple moving average SMA with a period of Signals of the trading system H4 Fibonacci Method In this trading strategy there is an interesting point: signals from RSI will need to be tracked on the chart with a time frame in 1 day, and the main work will be conducted on the 4H chart.

Here the Fibonacci levels come into play: we must go back to the four-hour chart, make it linear, and stretch the levels from the previous trend from right to left so that level 0 is at the top: When a signal from 2 sliders comes in and is confirmed by the RSI, the nearest Fibonacci level from the price chart is , Exit from the market is carried out by two methods: If you see that the price chart starts to slip when it reaches the lower level, in our case it was ,8.

The exit is made when the moving averages intersect again, and the green line appears over the red. So there is more chance of getting a solid profit on the market, but the risk of untimely exit is also higher. Results Even though three indicators are used in this trading system, it is quite simple and intuitive.

• option trading brokers australia
• bitforex coinmarketcap
• how to trade 5 minute binary options on nadex
• ice post trade management system
• forex heart
• horario mercado forex londres