Trend Finder 4hr

Hello Everyone,
Here is the 4hr system I have been developing that has proven consistent positive results.

Trend Finder Daily is a variation of this system using the daily chart. It has higher probability entries as well as longer moves.

Summary
This systems backbone is the Awesome Oscillator by Bill Williams. When combined with the indicators detailed below, it becomes a very high accuracy trading tool. It becomes very consistent on a 4hr chart. This system is designed to find high probability trades on a 4hr chart and lock in profits quickly and protect you from losses quickly.

Development
It all started when I added the awesome oscillator to a chart and began to realize its true potential. However, you will quickly realize that the Awesome Oscillator alone is not a powerful enough indicator. After months of testing over 25 different indicators, with god knows how many different setups, I have finally determined the following:

1. The Awesome Oscillator determines the general direction of a trending market with great accuracy.
2. ADX determines the strength of the current trend, as well as a confirmation on direction.
3. Stochastic helps determine when a trend has truly changed directions.

In Conclusion,
With the awesome Oscillator showing the direction of the market, the adx showing you that it has enough power to make you a decent amount of pips, and the stochastic oscillator confirming a trend move, these 3 indicators working together provides a very reliable entry signal.

These three indicators might sound like it will be confusing, but it is actually very simple, please continue reading for the full details of the system.

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The System

Chart Setup
Open a 4hr Chart.
Add the Awesome Oscillator.
Add the Stochastic Histogram, with 5,3,3 settings.
Add the Advanced_ADX Indicator with a 13 day period.

Long Entry Criteria:
1. The Awesome Oscillator is Green.
2. The Stochastic Histogram is Green.
3. The ADX Indicator is Green AND above the 15 line.

Its that simple! 3 Greens means GO LONG!

Short Entry Criteria:
1. The Awesome Oscillator is Red.
2. The Stochastic Histogram is Red.
3. The ADX Indicator is Red AND above the 15 line.

That's it for shorts! 3 Reds means SHORT.

Money Management and Exit Strategy
1. Open 2 trades which together risk no more than 3% of your total available balance.
2. Set a stop loss of -100 pips for both trades.

Trade 1: Set a take profit at +100 pips.
Trade 2: Allow this trade to run until 2 indicators are showing a reverse signal.
Both Trades: When you reach +50 pips, set the stop loss for both trades to 0. (Break even)
Both Trades: Ignore any exit signals for both trades until +50 is reached and a break even is set.
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Examples

http://img389.imageshack.us/img389/6894/smallch2.gif
Click Here to Enlarge Image

Results of Examples

Long Entry 1:
Trade 1: +100
Trade 2: +155

Short Entry 1:
Trade 1: +100
Trade 2: +34

Long Entry 2:
Trade 1: 0
Trade 2: 0

Short Entry 2:
Trade 1: +100
Trade 2: +186

Long Entry 3:
Trade 1: +100
Trade 2: +65

Short Entry 3:
Trade 1: +100
Trade 2: +184

Long Entry 4:
Trade 1: 0
Trade 2: 0

Example Totals

7 trades taken between 9 trading days on 1 pair:
5 Winning Trades.
2 Break Even Trades.
0 Losing Trades.
+1124 pips.

I have attached the indicators as well as the template I use below.

That's it, I hope this brings you as much success as it has brought me.
Feel free to ask any questions you may have.

Good Luck Everyone!

Do you have to wait for candle close to confirm the indicator's color (red or green)? If so, your chart shows entry candles but wouldn't these be signal candles?

Hello,

You do not have to wait for the candle to close. If the signal is there when the candle opens, you take the trade.

Looks good!
The only problem I see is that you can't visually look back on a chart and know that you're seeing all the losers.
If you enter a trade in mid bar, it may turn against you before the bar closes. You won't be able to tell that when you look back on your chart. You'll see it as a "no trade"
It will depend on real time forward testing.

7 trades won't tell you much.
I hope it holds up. It looks like a good idea.

Bull101, which pair generated the results you posted?...can't view the image for some reason.

A very good point. The back testing with these indicators can be deceiving.

The example picture is GBP/USD, i'll try and fix the image link.

How long have you been using this sytem for?

max

It would be great to have an EA written so we can test multiple pairs with an ADR > 100 pips. I will ask a few coders to see if anyone has time for this project.

I have been developing and demoing this system for about 6 months, trading live with it only about 2 months.

That would be great! Thanks!

How is the result for the 2 months?
Is your amount double?

Hi Bull101,

For example, if we take example as red line shown, all conditions were met.
But in fact,the market when opposite direction.
How do you trade in this case?

Attached is an EA with the entry and exit rules programmed in.

Hey Ronald,

nice job. Going to forward test it on a demo for a month.
Some how it looks better on 1H Chart GBP/USD.

Hello,

There are of course losing trades, no system in the world can be right 100% of the time.

However, in the chart you posted, that trade has not yet reached the -100 stop loss. The rules state that if the original +50 has not yet been reached, then you hold the trade. So in the example shown, this trade would still be open.

Thanks a lot! I will begin testing it today.

Thanks for sharing this. I've been testing a very similar method on the 4H charts but I'm also using the Heiken Ashi Multi Timeframe indicator on a lower time frame chart to determine the best entry specially on the EURUSD.

just stumbled on the post,but i tink we shdn't 4get there is no perfect system,no holy grail,demoing first over time will give us the validity,but i think demoing on majors will yield high profitability,tnx

Although there may be no holy grail, no perfect system, etc. we can get pretty damn close.