Hey again Josh,
I'm not that far ahead of you with this. I'm in the 4H testing and demo phase as you know. Here's what I have picked up.
I tried looking at multiple brokers so that I could have all the 4H time slots sewn up. Drove me crazy. Not only was it information overload and too much chart watching, but I couldn't get a sense of price developing across my charts because I had four different GU charts alone. So I dropped that and now I just go for my one broker.
I skip Asia. I also skip the 4H bar on the daily close, because I don't like placing orders between New York close and Asia open. I like to see momentum from my bars and I also like to manage trades bar by bar. Placing a trade at 11pm my time is not a good recipe for a night's sleep. There could be exceptions to this of course, if I feel I am at the beginning of a long term move. I make sure I am back at my desk for the pre London open bar. Then I watch the bars during the London/New York crossover until London close. So effectively, and according to my time (London time), I am watching 7am, 11am, 3pm and 7pm. Two weeks of watching is going to show you exactly where the dead time is.
Although I watch all pairs, on my intraday demo I am heavily biased towards the majors. So unless it's an absolute doozy I'm not looking for an AUDCHF trade for example.
There are so many signals and opportunities that the 4H in my very limited experience, needs some serious structure. Both in entry and exit style. Mike is heavily biased towards trades at round numbers, Clockwork71 plots weekly PPZs on his 4H charts and waits to see bars appear at them. No weekly PPZ no trade. Mike has also experimented with mechanical exit strategies on the 4H. Trailing the stop behind the high/low of the second bar back is sometimes useful.
I am experimenting with all these. I want to find something simple and structured so I can look at my charts for 5 minutes every four hours. I don't want to be agonizing. That way my daily mood can affect my trading too much. And I want a way for the market to take me out (one of the great strengths of your 2 day exit strategy)
So at the moment I am following the big round numbers and the big PPZs and looking for good quality price action on Alpari. I am making a rule not to tamper with my trade until the next bar close. And I am looking for about 2R or more a trade although as always I take what the market gives me. I don't want this to be a high frequency trading strategy and one or two trades a week will make me very happy. Like you I am also investigating the possibility of getting into big moves from 4H bars when the opportunity arises.
I am finding that trade management is really situational. It all depends what the chart suggest to me. But I write my management plan down and then follow it. Keeps me from going crazy.
My general principle around the 4H is that if I am out and about, I want a strategy that allows me to whip open my netbook and spend 5 minutes looking to se if there are any trades. Simple, easy and sustainable across time.
I would think your exit strategy on daily wouldn't work so well on 4H. That's only my instinct. It really depends what the market can give. Perhaps a different strategy depending on whether it's trend or counter trend? And a thought on the exit strategy, given what you said about curve fitting. Perhaps you are only evaluating exit strategies that can be easily backtested. I saw the 10 in your document and I didn't find much room for situational trade management. I can see the advantages of this approach (paid off handsomely with the recent EURAUD) but I wonder if a whole area of discretionary exits has been excluded from your research because it's very hard to quantify in that way. Just a thought.
We're on a very similar journey with similar approaches. I really look forward to seeing where you go with all this. Let's stay in touch and compare notes.
I'm not that far ahead of you with this. I'm in the 4H testing and demo phase as you know. Here's what I have picked up.
I tried looking at multiple brokers so that I could have all the 4H time slots sewn up. Drove me crazy. Not only was it information overload and too much chart watching, but I couldn't get a sense of price developing across my charts because I had four different GU charts alone. So I dropped that and now I just go for my one broker.
I skip Asia. I also skip the 4H bar on the daily close, because I don't like placing orders between New York close and Asia open. I like to see momentum from my bars and I also like to manage trades bar by bar. Placing a trade at 11pm my time is not a good recipe for a night's sleep. There could be exceptions to this of course, if I feel I am at the beginning of a long term move. I make sure I am back at my desk for the pre London open bar. Then I watch the bars during the London/New York crossover until London close. So effectively, and according to my time (London time), I am watching 7am, 11am, 3pm and 7pm. Two weeks of watching is going to show you exactly where the dead time is.
Although I watch all pairs, on my intraday demo I am heavily biased towards the majors. So unless it's an absolute doozy I'm not looking for an AUDCHF trade for example.
There are so many signals and opportunities that the 4H in my very limited experience, needs some serious structure. Both in entry and exit style. Mike is heavily biased towards trades at round numbers, Clockwork71 plots weekly PPZs on his 4H charts and waits to see bars appear at them. No weekly PPZ no trade. Mike has also experimented with mechanical exit strategies on the 4H. Trailing the stop behind the high/low of the second bar back is sometimes useful.
I am experimenting with all these. I want to find something simple and structured so I can look at my charts for 5 minutes every four hours. I don't want to be agonizing. That way my daily mood can affect my trading too much. And I want a way for the market to take me out (one of the great strengths of your 2 day exit strategy)
So at the moment I am following the big round numbers and the big PPZs and looking for good quality price action on Alpari. I am making a rule not to tamper with my trade until the next bar close. And I am looking for about 2R or more a trade although as always I take what the market gives me. I don't want this to be a high frequency trading strategy and one or two trades a week will make me very happy. Like you I am also investigating the possibility of getting into big moves from 4H bars when the opportunity arises.
I am finding that trade management is really situational. It all depends what the chart suggest to me. But I write my management plan down and then follow it. Keeps me from going crazy.
My general principle around the 4H is that if I am out and about, I want a strategy that allows me to whip open my netbook and spend 5 minutes looking to se if there are any trades. Simple, easy and sustainable across time.
I would think your exit strategy on daily wouldn't work so well on 4H. That's only my instinct. It really depends what the market can give. Perhaps a different strategy depending on whether it's trend or counter trend? And a thought on the exit strategy, given what you said about curve fitting. Perhaps you are only evaluating exit strategies that can be easily backtested. I saw the 10 in your document and I didn't find much room for situational trade management. I can see the advantages of this approach (paid off handsomely with the recent EURAUD) but I wonder if a whole area of discretionary exits has been excluded from your research because it's very hard to quantify in that way. Just a thought.
We're on a very similar journey with similar approaches. I really look forward to seeing where you go with all this. Let's stay in touch and compare notes.
