The Concluding Series on “Advance Forex Strategy – The 4Hour Break Out Method”[PART 3]

Welcome folks to The Concluding Series on “Advance Forex Strategy – The 4Hour Break Out Method”[PART 3]….

Before you go ahead reading this concluding series of this tutorial …Please take your time and read:

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The  chart  above  Is  a  trade  spotted  on  the  daily  chart  with  a  strong trend  line.  However  I  initiated the  trade  from the  4H chart  as  usual, see how price kept banging against the trend line on the retrace?

Normally I would have been stopped out on this trade at break even because after the initial retrace price came back to test the trend line again  but  I  knew  this  trade  may  need  a  little  room  to  breath  as  the trend line was from the daily chart.

Ok  so  we  have  seen  a  few  good  trades  lets  see  some  that  we couldn’t take because price wasn’t cooperating.

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Above there is a perfect consolidation forming above the 30ema with a  trend  line.  Price  broke  out  and  I  had  my  buy  order  ready  at  the trend  line  but  unfortunately  price  left  without  me  on  board.  This  will happen sometimes and It’s a fact of trading you cant win them all. Be patient because like buses there will always be another one coming along soon.

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Above is yet another example of this setup in action, this is a 1H chart which I spotted and entered the trade. I moved my position to break even  very  quickly  as  this  trade  looked  like  it  had  no  volume  and moving sideways. Not long after I moved the stop to break even the trade fell out of the sky making my trading account happy again

You may be wondering what the other moving averages are for?

Well they are not essential to the main system and setup but they are very useful as targets when price is passing through them.The 150,200 and 365 ema’s are watch by traders and institutions all over the world and therefore price reacts to them as it approaches.

I  highly  recommend  you  use  them  during  the  planning  of  placing stops and taking profits.

For example if the 365ema was below you and you were planning on taking a sell trade from a break of a double bottom it would be wise to wait until the 365 is broken or miss the trade altogether.

Lets have  a  look at  a chart so  you  can  see exactly what  I’m talking about.

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On the chart above I have marked with a white arrow every point that price has bounced off of one of the ema’s. As you can see they act as a pivot point to price, usually stopping it dead in its tracks. Generally the 365ema has more importance than the 200 and the 200ema has more importance than the 150.

TIP: If you see all the moving average come together be ready for a large move, this doesn’t happen very often.

Step By Step Live Trade:

I wanted to show you the process of taking a trade with this system from start to finish so I decided to take 4 screen shots of a live trade I recently  took  as  it  was  happening,  each  screen  shot  is  a  different stage of the trade.

The  screen  shot  below  is  just  after  I  entered  the  trade,  NZDUSD created  a  lovely  double  top  in  an  up  trend.  The  double  top  was broken  with  a  volume  candle  and then  retraced  back  to the  support line triggering my order. I placed a 50 pip trailing stop to lock in profits and a profit target chosen from the daily chart if it gets that far.

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A hour later we are in profit by 50 pips which means the trailing stop has moved to break even, this trade is now a free ride!

I have nothing to do now but collect whatever profits the market makes available to me, the trailing stop will make all the calls from now on eliminating the need for human interference which will only cause us to lose profits due to fear and greed.

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The last 4 hour candle has closed as a very large bullish candle indicating volume, we are currently around 100 pips in profit and the trailing stop has locked in 50 pips for us, lets see how far this move will go, will it get to our profit target of the strong resistance on the daily chart?

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12 hours after the trade was initiated we hit our profit target of 132 pips my weeks trading is over! This trade never went negative on me by more than 5 pips.

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Conclusion:

As you can see using this method of entry is very profitable and gives plenty of good trades every month. I  would  like  to  point  out  that  you  should  not  ever  follow  a  trading system blindly, as you gain experience with a trading system you will begin to get a feel for the good trades and bad ones alike.

Once  you  get  the  hang  of  trading  these  setups  I  highly recommend that you study candlestick formations to use as your entries,I will create a post on that any time soon..

Click Here To Read: Understanding Candlestick  Formation – Price Action!

The 4Hour Break out Strategy will slowly but surely build your trading account.All you need to do is keep your discipline under control and don’t try to trade too many pairs at once.

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