Most Recommended Strategy for 4h Chart and Daily Chart Trading

As the founder of Forex service company 2^nd Skies Forex and KronosFX Fund, Chris Capre has once earned $830,000 in 6 months starting with only $3,000.

Today’s article shares his practical experience over the past 18 years since he entered the forex market. He learned these lessons after losing 2-3 million dollars and missing numerous opportunities, hence, we hope that these lessons learned over years can help those who are struggling in the market.

Chris Capre

Not every one can sit in front of the computer for hours to trade. Many traders have their own full-time job and have families to spend time with. Therefore, their spare time is limited. Even so, they still want to participate in forex trading.

Maybe you only have a few hours to trade every day and you can’t spend the whole day in managing position and analyzing charts. If this is your case, then I would recommend the 4h chart or the daily chart.

This is because a shorter-term chart takes more careful analysis and more variants to combine. This kind of charts have more fluctuant prices, therefore requires more attention and faster decision-making ability. As a result, it takes a great amount of attention in a short period of time. If you spend too much time trading, it would easily lead to terrible trading decisions.

Those who are new to the market should particularly avoid shorter-term charts. Meanwhile, those who have little time to trade should better choose the 4h or daily chart.

Monthly chart, weekly chart, daily chart and 4h chart of EUR/USD

For long-term trading, or position trading, one can hold for a year or even longer. Choose the monthly chart is an undisputable choice to understand the price trend over the years.

If you hold only for months and want to understand the market over the recent few years, then the weekly chart will do;

For swing trading which holds from days to months, then a daily chart;

If you only hold between days to weeks, 4h chart is your choice.

So how to trade in these longer-term charts? I would recommend breakout drawdown trading.   

This comes handy when trading with trend. It has 3 major points:

1. identify the overall price and market trends in the daily charts;
2. identify the key support and resistance levels, and the price has at least touched the key positions twice;
3. wait for market breakout and the drawdown to the key position.

The point of the strategy is: which trend are you in? Where are the key support and resistance levels? And where is the best position to drawdown?

A similar approach can also be used in a 4h chart. Extra tips:

1. Use the daily chart as the overall background information for the trading.
2. Do not expect the market to go straight to your goal. It always fluctuates. To make your judgements that when the drawdown is only a part of the trend and when it will lead the price to reverse, will take long-term practice and great familiarity of the market.
3. Draw the support and resistance levels on the daily and the 4h charts.

Here is an example of how to use the support and resistance levels:

Finally, for those who have limited life due to life or work, there are lots of ways to participate in the retail market other than staying up late.

My recommended way is to take advantage of the longer-term chart. It not only saves your time, but also saves your energy for daily work and life.