Multiple Timeframe Trading Method

This method is an evolution of a prior method I posted here on FF awhile back. None of this is anything new, it all exists here on FF, but has been tweaked and re-purposed to my preferred style and liking. I look forward to sharing more as time goes on, meanwhile, here's an outline of the approach I take on the 4H and 1H time frames. I will post Weekly and Daily set-ups at a later date, as I don't want to overwhelm, but it is basically the same as the 4H, with some minor differences.

Currency Pairs: EU (Weekly, Daily, 4H and 1H), all other pairs (Weekly, Daily, 4H only)

Indicators: 30 & 60 EMA's

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A. Entry Set-ups for the 4H and 1H* TFs (using long set-ups as an example):

1. Wait for crossover of 30 & 60 EMA's.

2. Wait for price to pullback and close below the 60 EMA. *For 1H TF, It is important that this is the first time price has pulled back to this zone, second and third instances do not apply. 4H can have multiple entry zones on same trend.

3. We will be in the "Entry Zone" once price has closed below the 60 EMA. Note that the 30 EMA must still be above the 60 EMA for this to be valid. The entry zones are basically areas where I will be looking to enter once the set-up has occured. It's really up to the traders discretion, as I find the actually entry not to be as important as patiently waiting for the proper set-up on the higher TF's. I will often enter based on the lower TFs if I am available to do so. I will also enter simply at the close of the 1H or 4H bar that is in my "entry zone".

4. Once in the entry zone, I prefer to add 5 positions on the 4H set-up and 2-3 positions for 1H, the reasoning will be explained later in more detail, but I like to keep 1-2 positions open for longer term holds, while closing out the remainder for shorter term profits. The entries are normally spread out a bit, I will likely enter a couple on the first close, and the rest off of lower TFs or at a second or third close below. If I have existing shorts from a prior entry set-up that are in-profit, I will often act more "freely" on my entries, not concerning myself with pinpointing on lower TFs.

5. Stop losses will vary per entry method. My attempts on the lower TFs will have tighter stops and will likely require multiple attempts. Stops on the longer TFs will be a bit looser, normally between 50-100 pips, usually just below Daily low/high.

* A note regarding 1H entries: Entries in agreement with the 4H trend will be treated exactly as stated above. Entries that are attempting to reverse the 4H, must wait for the first break of a lower low on the 4H bar, while maintaining crossover status on the 1H. Once these cross back upward the set-up is void.


B. Managing Shorter-Term Positions for Entries on the 4H and 1H TFs

I do not have specified target profit for any of my positions. What I do is move my SL with each swing upward until I get stopped out, but I only do this for about half to 3/4 of my positions, leaving preferably a few to hold longer term.

1. I use only the 1H TF to manage the locations of the SL for the shorter term positions.

2. After all positions have been opened, and price has moved up, wait for a retrace back to the 60 EMA. Once price has closed below, wait for price to resume upwards. If it does move upwards, past the 30 EMA, move SL just below the swing low. Remember to leave at least 1 position with SL at original entry point for longer term hold.

3. Repeat the step above until SL is triggered. Once triggered, I will likely be looking to add positions in the opposing direction once a proper set-up has occured.


C. Managing Longer-Term Positions for Entries on the 4H and 1H TFs

These positions are managed with a bit more discretion and often use the assistance of the Daily and Weekly TF's to manage. The idea is to hold until a strong reversal set-up is present on the 4H, but I would still like to hold if the Daily and Weekly still show upward strength. I will expand on this a bit more once I flush out the Daily and Weekly set-ups.

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In conclusion, I would like to note that much of my enlightenment occurred during the continuos study and review of the the "Millepede Thread". I'm sure that I would be very close ending my journey if it wasn't for the priceless information shared by Graeme.

I look forward this journey of continuous learning and enlightment!

Best,

JCPFX



Below is a sample chart that references a few ideal set-ups. Keep in mind, it is an "ideal" set-up, there will be plenty of failed set-ups to post as this moves forward, but the beauty of using multiple TF's is the balance it brings during these times.

Hallo Jcpfx, can I ask wish chart software you using?

Hello Materyb,

It's GFT Dealbook Web.

Short EU at 4360 at close above the 60 EMA on the 4H. Will post chart a bit later.

Here's the chart on yesterday's entry. I set my initial SL to BE before going to bed. Got stopped out and re-entered this morning at 4378.

Added two more short positions at 4374. SL for both at 4405.

All 4 positions stopped out for average loss of -29 pips.

Placed 4 new entries at the close of the recent 4H bar, short at 4399, with SL just above the bar. This will likely be the last attempt, as price will either stop me out and resume upward, thus crossing the EMAs back upward, or price will drop allowing me to manage the trade on the 1H.

Hi Jcpfx,

Once in the entry zone what do you look for for actual entry. Are you using candle patterns?

regards,
julai

Price has broken downward a bit with the 4 positions in tact. Now price has approached a long entry level on the 1H, but this is not in agreement with the current 4H status, so i will wait for 1 of 2 things to happen. The first is the break of a high on a 4H bar. The second and most preferable is the crossover of the 15M EMAs, with an entry at a close below the 60EMA. An entry based on either one of these is only valid as long as the 1H EMAs remain crossed to the upside.

Hello Julai,

My entries will vary depending on my availability to monitor the trade. I prefer to enter on the lower TFs but am often unable to monitor the trade, so I will simply place my entry at the close of the 4H bar that is beyond the 60 EMA with a SL at 50 pips or just beyond the daily high, whichever is closer. I will get stopped out 50-60% of the time with this type of entry, and will re-enter at the close of another bar or drill down to lower TFs is possible.

The alternative to this is to enter based off of the 5-15M TFs in which I have a couple of preferred methods of entry that I can explain better with a chart, but will try to explain briefly now in writing. The first is simply a pull back to the EMA's much like on the larger TFs, with an entry at the close beyond the 60EMA, but I generally like to what for the close of a larger TF bar to actually enter. For example, if I am in an entry zone on the 1H, I will drill down to 5H and wait for pullback to the 30/60 the for a 5M bar to close beyond. Once this happens I will wait for the 30M bar to close for the actual entry, and set my SL about 20 pips beyond the 30M bar. For a 4H entry zone I prefer the 15M I would use the 2H bar close to enter, I like about a 1/8 ratio.

The second method of entry is PA based and will be best explained in a chart, I will try and post something within the next couple of days.

Hope this helps.

Jcpfx

Thanx for sharing!

Hi Jcpfx,

thx for your answer, maybe with a chart i can visualize the entries better.

When you have conflicting signals like in this current trade where H4 is short and H1 long (since it's the 1st pullback after cross) you will always follow the higher TF signal? What do you do when you get a long H1 entry setup, do you quite the H4 trade or let it stop out?

thx for your answer.

regards,

julai

Julai, yes, the 1H has to be in agreement with 4H in order to place a trade immediately after the close below the 60EMA. But that doesn't mean that there will not be an entry. In the set-up we are looking at now I am waiting to see if the 15M will crossover while there is still space on the 1H. I also mentioned above that I will also enter if the 4H breaks a previous high, but I also find this less reliable than the 15M crossover confirmation.

Hopefully the chart below clears it up a bit.

In regards to when I would close my 4H entry, I currently have the SL above the high of the day, I will likely set to break-even before end of day.

Here's an update on the status of the 4 positions placed earlier this week off of the 4H entry zone, as well as a recent set-up on the 1H.

The recent pullback and close above the 60 on the 1H was an entry zone for additional shorts as well as a place to move the SL from the 4H entries. Being in CA I was asleep during this set-up so I have no additional entries, but I will be moving my SL.

Hi Jcpfx,

Have been away for a while. Looks like there was another trade according to your system on H1 which I missed. Currently I'm short from the H4 setup. Market is quite bullish for my taste.

How do you manage your trades? Do you let the profits run? Also could you explain more on your position size?


Regards,

Hello Julai,

Yes, there was an additional entry zone (short) at the last pullback to the 60EMA. As shown in the rules on the first post, I move my SL at each retrace to the 60EMA on the 1H TF. So in the case of the recent retrace my SLs were moved to just above the high of 4305 to 4315.

Aside from the entries, this is very much a mechanical system. I find that personally my weakness is in managing my trades after entry, so I have resolved to waiting for the market to stop me out versus having set TP. I find this helps me tremendously from a psychological stand point. In the long run, I trust that this will provide enough winners with large profits that will cover any other positions that may have been "cut-short" profit-wise, or viewed as stopped out pre-maturely.

In regards to position size, I will use the example of a $5,000 account with a single position being one 10k lot, or $1 per pip. As I mentioned, I personally like to accumulate about 4 positions, but it really just depends on my availability as well as the opportunities presented. Keep in mind that if I get to the 3rd or 4th position that these would have been placed on the lower TF's and would have rather tight SLs.

I hope this makes sense, let me know if you have any more questions.

Best,

JCPFX

Hi,

Thx for the quick response. When you say you add 5 positions on H4 and 2-3 positions on H1, do you mean that you scale in or enter 5 positions at once?

I generally don't enter all five at once, although I will enter 2-3, it really depends on the scenario, and how tight I can set my SL.

As I write this, 3 of the 4 current short positions were stopped out at 4315. The fourth is still at break even. As I mentioned in post 1, I do like to try and keep at least one position open and set to break even.

I am unable to post a chart right now, but the 4H is currently setting up for a possible short entry zone if price closes above the 60EMA. As you mentioned earlier, price was looking very bullish to you, and you are likely correct, but regardless, it is important for me to stick to my rules regarding entry zones, I will definitely be on the hunt for opportunities with tight SLs if the signal is given. Long-term consistency, with low-risk entries is key.

Regarding the 1H, it's looking like it may cross to the upside again, I will trade this according to the previously mentioned guidelines when price pulls back.

I'll try and post chart tomorrow.

Best...

Here's the chart I was referring to, I opened 2 positions at the close (4310) with current SL 50 pips above daily high, I will likely move SL tighter before I go to sleep, if drops sharply, will move to BE.

SL moved just beyond spike/daily high to 4337. Not a sharp enough drop yet for breakeven.

Here's what I was talking about on the 1H. Since 4H is still bearish, if price retraces at a close below the 60 on the 1H it would need a cross upward and pullback close below the 60 on the 15M (or 5M with caution) chart to be a valid long.