GPY 4H Strategy Trading System For MT4
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The GPY 4H Strategy Trading System For MT4 is specifically designed to trade the GPY related pairs.
Every currency pair has a unique characteristic and that's why professional traders often assign different strategies to trade different trading instruments. Since GPY related pairs are more volatile, it often becomes tough for intermediate and novice traders to use the generic strategy to deal with the GPY related assets.
Let's learn about the GJPY 4H strategy and become specialized in trading volatile instruments.
Key Factors for GPY 4H Strategy Trading System For MT4
Timing the trade properly is very important for this trading strategy. To improve the accuracy in each trade, it is better to use the system in the 4-hour time frame. Candlestick patterns need to be observed while using this system since we are going to deal with extremely volatile assets.
During the executions of a long trade, we must look for the bullish candlestick patterns as its (candlestick pattern) use will reinforce our trade signals. Similarly, the presence of bearish candlestick pattern during the execution of short trade is going to give us more confidence that the trade signal is going to work.
For the trade filtering process, the MACD (Moving Average Convergence and Divergence) is going to play a significant role.
In MACD, an exponential moving average and Histogram gives critical information regarding the strength of the buyers and sellers. If the Histogram moves below the zero lines, it will suggest a bearish dominance in the price. On the other hand, if the Histogram moves above the zero lines, it will indicate a bullish possibility.
On the other hand, if we correlate the position of the exponential moving average in the MACD along with the histogram bars, we can easily identify the retracement phase. For instance, positive histogram bars on the top of the reference line zero and EMA trading above the reference line suggest the price movement is along with the bullish trend. But if the EMA lies below the zero lines and the histogram bar is on the positive side, it indicates the price is in the bullish correction phase.
In the image below, we can see this trading strategy's primary interface and how the MACD provided the bullish and bearish sentiment in the price.
GPY 4H Trading Strategy
GBPJPY pair is one of the most volatile pairs among the cross currency pairs. For the potential trade signals, it is better to use the strategy during the Asian or the London trading session.
Let's have a look at the 4-hour chart in the GBPJPY pair and see how the system generates potential trade signals.
Bullish Trade Entry
1. Look for the trade signals at the opening of the London or Asian trading sessions only.
2. Execute a long trade if the MACD Histogram moves above the zero lines right after a bullish candle in the 4-hour chart.
3. Do not execute any trade if you have a bearish candle or MACD Histogram that remains within or below the zero lines.
4. Ignore the trade signals if the slope of the EMA is negative and the bars in the histogram get smaller.
Bearish Trade Entry
1. Look for the trade signals at the opening of the London or Asian trading sessions only.
2. Execute the short trade if the MACD Histogram moves below the zero lines.
3. Do not execute any trade if you have a bullish candle or MACD Histogram that remains within or above the zero lines.
4. Ignore the trade signals if the slope of the EMA is positive or histogram bars get bigger.
Entry
Both buy and sell entries will be after the H4 candle closes. Wait for the closing of the candles and never take any trade in the running bars.
While taking an entry, analyze the risk exposure for the trade and make sure the overall risk factor is not more than 2% of your account balance.
Stop Loss
In general, the stop loss is placed by using the high and low of the candlestick. Since the pair is extremely volatile, it is better not to place the stop to close the support or resistance level. Therefore, using a buffer often saves the traders from stop loss hunting.
Take Profit
According to the inventor of the system, the ideal take profit for this trading strategy is 100 pips or more. Since the profit target is very big, you can use the trailing stops to maximize the profit and limit your potential losses. At times, you can also book a certain portion of the profit by closing the trade partially.
For instance, if you trade 2 standard lots, you can close 50% at 50 pips and let the profit run until there is any significant market reversal. You can observe the price every 4 hours, and if you spot any reversal signal, exit the trade.
Trade Management
In every trading strategy, trade management is very important. Without following a strong risk management plan, no one can succeed even after using the best trading system in the world. Lets see some effective risk management techniques for this system.
• For Sell trade- If the price fails to reach 100 pips and the market starts to upward, we should close the trade.
• For Buy trade- If the price fails to reach 100 pips and the market starts to downward, we should close the trade.
In each trade, the maximum risk should never exceed 2% of our account balance. And the minimum risk to reward ratio must be better than 1:3.
Summary
The GPY 4H Strategy Trading System is not a complex system. To make a consistent profit with this system, it can help if you have the skills to identify the support and resistance level effectively. And the MACD indicators data should be considered to filter the best trade signals. To improve the efficiency of the system, we need to focus on the Japanese candlestick pattern and execute our trades during the active trading sessions only. Last but not the least, always follow a strong risk management plan since we have to deal with the losing trades even after doing the perfect market analysis.
Download the complete system description and the files here:
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