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H4 Power

  • #41
  • Apr 14, 2013 10:50am Apr 14, 2013 10:50am
Here's an example of how the techniques keeps us from big losses..

The H4 engulf happened last week on Brent Oil.

We switched to m15 for our entry and at worst took a very small loss.

As a rule though if h4 closes against the trade before m15 gives a signal I consider the trade invalidated.
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tradewith60
  • #42
  • Apr 14, 2013 10:59am Apr 14, 2013 10:59am
Shortly after the failed h4 engulf short Brent gave an outside bar long, switched to m15 and there were 3 opportunities to ride the move long. (red line marks the h4 close)
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tradewith60
  • #43
  • Apr 14, 2013 11:01am Apr 14, 2013 11:01am
very interesting post.
how long have you been trading this way?

thanks
  • #44
  • Apr 14, 2013 11:04am Apr 14, 2013 11:04am
Quoting 60minuteman
Hi Whatfx... I wanted to wait until we had some live set ups to explain entry techniques, but one I use the most often is: I wait for the h4 engulf or outside bar to close, then I switch to m15 and trade the next m15 engulf/ouside bar, inside bar in that direction.
That's a really good way to reduce the risk without hampering your reward. I'd like to ask you a question though - would you consider taking multiple entries on the M15, as long as the H4 entry setup is not invalidated?
  • #45
  • Apr 14, 2013 11:08am Apr 14, 2013 11:08am
Quoting relaxtrading
very interesting post. how long have you been trading this way? thanks
I have been trading variations of these ideas for a few years, maybe just 3 years now... (I tend to get bored and jump around timeframes alot... bad habit!)

But the one thing that has always remained is the use of s/r and the basic premise of waiting for a close over the previous s/r (engulf).

I have not touched on trend and stopping points yet, and how price action is different if you're moving with or counter to the trend, but I will soon, just want to be sure that the concept of price having to engulf before it can change direction is very clear.
tradewith60
  • #46
  • Edited 4:15pm Apr 14, 2013 11:12am | Edited 4:15pm
Quoting Barbossa
That's a really good way to reduce the risk without hampering your reward. I'd like to ask you a question though - would you consider taking multiple entries on the M15, as long as the H4 entry setup is not invalidated?
I don't myself, but... if the next h4 closes inline with the first set up, then I sometimes will add another trade there... I think Fridays brent short was an example, I took a short thursday evening off the h4 engulf, then when we closed down again friday morning I added a second lot... (think there is a chart on page 1)

...oh.. now the only downside to this is it may test your balls for dealing with a loss... sometimes you may take 1 or 2 m15 losses before the third set up is a winner... I haven't a problem with that, but for many it is a massive psychological barrier to their trading..
tradewith60
  • #47
  • Apr 14, 2013 11:47am Apr 14, 2013 11:47am
Quoting 60minuteman
I don't myself, but... if the next h4 closes inline with the first set up, then I sometimes will add another trade there... I think Friedays brent short was an example, I took a short thursday evening off the h4 engulf, then when we closed down again friday morning I added a second lot... (think there is a chart on page 1) ...oh.. now the only downside to this is it may test your balls for dealing with a loss... sometimes you may take 1 or 2 m15 losses before the third set up is a winner... I haven't a problem with that, but for many it is a massive...
Thanks, you covered both scenarios (second entry after a losing one and an add-on entry). As for the M15 losses, I prefer to look it that way - as long as I don't try to force myself into the market, a few failed entries would still cost me less than a failed H4 entry. I'm looking forward to the trade exit point explanation.
  • #48
  • Apr 14, 2013 12:39pm Apr 14, 2013 12:39pm
Quoting 60minuteman
I don't myself, but... if the next h4 closes inline with the first set up, then I sometimes will add another trade there... I think Friedays brent short was an example, I took a short thursday evening off the h4 engulf, then when we closed down again friday morning I added a second lot... (think there is a chart on page 1) ...oh.. now the only downside to this is it may test your balls for dealing with a loss... sometimes you may take 1 or 2 m15 losses before the third set up is a winner... I haven't a problem with that, but for many it is a massive...
It seems this is akin to being a power hitter in baseball. Hit two pop flies, but 3rd one is a homerun, vs just trying to single your way around the bases. If your profit is greater than loss at the end of the week it's all that matters.
  • #49
  • Apr 14, 2013 1:26pm Apr 14, 2013 1:26pm
Quoting vamp
It seems this is akin to being a power hitter in baseball. Hit two pop flies, but 3rd one is a homerun, vs just trying to single your way around the bases. If your profit is greater than loss at the end of the week it's all that matters.
Exactly Vamp, I tend to struggle with 1R trading systems, I like to have the possibility of hitting home runs but at the same time I dont want to leave my ass blowing in the wind with a huge stop loss...

That being said, I will sometimes just set pendings for the breakout of the low/high after engulfing bars, but that is when I cant be at the charts and when I am 99% sure of what the trend direction is.

Another option is to drop to m15 for the retrace entry but place your stop above/below the h4 signal bar, which is kind of a nice middle option,

knowing that price on any timeframe has to engulf/close under the s/r for it to turn we can feel confident that most of the time will catch the move when it comes...
tradewith60
  • #50
  • Apr 14, 2013 1:40pm Apr 14, 2013 1:40pm
here's another example of how we will sometimes be saved from a losing set up by switching to m15 for our entry,

Trade was EJ last week:

First chart shows the h4 engulf set up long, second chart shows 15 retracing but it doesn't give us a long signal until after the next h4 had closed down invalidating the long trade.
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tradewith60
  • #51
  • Apr 14, 2013 1:50pm Apr 14, 2013 1:50pm
Here's another EJ example from last week where things didnt work out as nicely (just to be clear that it;s not gonna be all one way traffic INTO your trading account... there are losses for you to savour too)

First chart H4, second chart M15 entries..

Although, that being said if you went for the second option of m15 entry with the h4 stop as i pointed out a few posts back, you would of had a 1 hit winner... swings and roundabouts
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tradewith60
  • #52
  • Apr 14, 2013 6:26pm Apr 14, 2013 6:26pm
So are u shooting for a 2/3 success rate, but can accept that lower hit rate because u get 1-2 trades a day and often greater than 1R?
  • #53
  • Apr 14, 2013 6:45pm Apr 14, 2013 6:45pm
Quoting vamp
So are u shooting for a 2/3 success rate, but can accept that lower hit rate because u get 1-2 trades a day and often greater than 1R?
not a big fan of talking about data anymore, because a simple system will give such a broad range of results for every trader.

All I would say is I expect to be in profit at the end of the week, and I have never seen any reason why I should not be in profit every week.

I presume by now you have pulled up a pair you like to trade and started to look at these set ups, you tell me what you expect?
tradewith60
  • #54
  • Apr 14, 2013 7:38pm Apr 14, 2013 7:38pm
Thanks 60minuteman for a unique way of looking at H4 bars. Here goes my small initial test trade for your comments.
RS
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  • #55
  • Apr 14, 2013 8:01pm Apr 14, 2013 8:01pm
Quoting 60minuteman
not a big fan of talking about data anymore, because a simple system will give such a broad range of results for every trader. All I would say is I expect to be in profit at the end of the week, and I have never seen any reason why I should not be in profit every week. I presume by now you have pulled up a pair you like to trade and started to look at these set ups, you tell me what you expect?
I expect to get signals and just messing about with the s/r and trying to understand the cycle u can ride some nice trades but as u stated before even the losers are rsther small with the right approach. Balance sheet at the end of the week/month/year is what matters.

And if u keep the thread up I guess we will see how I manage with it. Fits my style of watching four hour or actually matchez my time constraints.

And you're only watching 4 pairs so hell it's not even that intensive to keep track of.
  • #56
  • Apr 14, 2013 8:21pm Apr 14, 2013 8:21pm
Quoting RisingSun
Thanks 60minuteman for a unique way of looking at H4 bars. Here goes my small initial test trade for your comments. RS {image}
yeah im expecting a counter move long, to the s/r lines I have marked, then sell the living crap out of it..!
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tradewith60
  • #57
  • Apr 14, 2013 8:26pm Apr 14, 2013 8:26pm
Quoting vamp
I expect to get signals and just messing about with the s/r and trying to understand the cycle u can ride some nice trades but as u stated before even the losers are rsther small with the right approach. Balance sheet at the end of the week/month/year is what matters. And if u keep the thread up I guess we will see how I manage with it. Fits my style of watching four hour or actually matchez my time constraints. And you're only watching 4 pairs so hell it's not even that intensive to keep track of.
nice, good luck to you then.. the real key is a rigid approach over a number of trades,if you can stick to something for 50 trades you will have a real understanding of whats working and whats not.
tradewith60
  • #58
  • Apr 14, 2013 8:47pm Apr 14, 2013 8:47pm
wow... gold absolutely bombing
tradewith60
  • #59
  • Apr 14, 2013 9:07pm Apr 14, 2013 9:07pm
H4 M15 combo on EJ +49, considered exiting when the h4 closed against me, but was feeling worth the hold, looks like right decision

Daily s/r targets = red lines
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tradewith60
  • #60
  • Apr 14, 2013 9:22pm Apr 14, 2013 9:22pm
Quoting 60minuteman
H4 M15 combo on EJ +49, considered exiting when the h4 closed against me, but was feeling worth the hold, looks like right decision Daily s/r targets = red lines {image}
I thought that you considered the signal invalid if no confirmation by the close of the next H4 candle.
In your first post, you say that you consult the Daily and weekly charts for trend. IMO, both show an uptrend.
So I don't understand how you saw this as a good trade.
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