Forex strategy Day Hour, based on the evaluation of 2 timeframes, trade is conducted only on a trend, uses a combination of day (D1) and 4-hour intervals (H4). Other combinations of time intervals are possible, for example H4 – H1. The currency pair can be absolutely any.
On the daily interval (D1), using a simple moving average SMA, the direction of the trend is determined in the market, and at the 4-hour interval – trading signals for the conclusion of the deal and exit from the market.
Forex strategy Day Hour – Forex indicators, which are present in the trading terminal MT4:
1) Simple moving average SMA (3) with a shift of 3, set to a daily and 4-hour interval;
2) MACD indicator (12,120,5), set to the interval H4;
3) The indicator RSI (9) with the levels 30, 70, set to the interval H4.
Forex strategy Day Hour. Technical side:
1. On the interval D1 – if the closing price of yesterday’s day candle is below the moving average, then on the interval H4 we take into account the trading signals for sale. If the closing price of yesterday’s day candle is above the moving average SMA (3), then on the interval H4 we take into account the trading signals for the purchase.
Well, if it is difficult to determine where the candle was closed, for example, the doji appears on the chart at the intersection of the SMA, then the best option is to skip the trading signal, and expect a clearly pronounced signal until it appears.
After we have determined what transaction we are prepared to conclude, on the reduced time scale of H4, the following factors should be taken into account:
1) the signal from the forex indicator MACD – the histogram and the signal line above, below zero.
2) the direction of the RSI indicator is up or down.
3) whether the candle is closed above or below the moving average.
Yesterday’s Japanese candle on the daily price chart closed above the moving average, which means that today, according to the rules of this trading system, it is necessary to take into account trading signals only for purchase on a 4-hour price chart.
Situation 1 (2011.04.21 00:00). The closing price of the last candle at the interval H4 is above SMA (3), the MACD of the histogram is above zero, the signal line is above zero and entered the histogram, RSI is in the oversold zone. We conclude the transaction for purchase.
Histograms MACD with a long period, like 120, crossing the level of zero, on H4, D1 in practice show the beginning of a new, long trend, with possible corrective steps. Therefore, the position short, you need to consider in small periods with a trailing stop. As soon as the trailing stop has worked, it is necessary to study the situation: whether it was a signal for a turn and continuation of an upward trend, or it was a price jump.
We considered the situation D1 – H4, and now H4 – H1. In this case, on H4 (situation 2 on the graph, 2011.04.26 00:00) a large white body of the candle indicates a revival of the strength of the bulls. The price was fixed above the moving average, the signal line entered the histograms MACD – a good option to open positions on the trend.
Stop-loss is set at the local minimum (when making a purchase transaction) or the maximum (in our case) of the previous candle.
Closing of a trading position occurs at return signals of indicators forex and sometimes at trade on a timeframe at 4 o’clock the necessary moment for closing of a trading position can come on following trading day. Or calculate the take-profit taking into account closer levels of support and resistance, as well as Fibonacci extensions.
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