4H Trader Advanced Trading System For MT4
Table Of Contents:
- 4H Trader Advanced Trading System For MT4
- 4H Trader Advanced Trading System For MT4 - Indicators Used and Chart Setup
- Trading the 4H Trader Advanced Trading System For MT4
- Stop Loss & Take Profit Settings
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 4H Trader Advanced Trading System For MT4 is a trend-following trading system. This is a trend-following trading system that deploys a trend indicator as well as a momentum indicator for filtering the signals as they are generated. The essence is to trade along the trend, and to do so using only the best quality signals.
4H Trader Advanced Trading System For MT4 - Indicators Used and Chart Setup
Once more, this strategy deploys two custom indicators, known as:
- 4h trader (arrow alert) indicator
- Support and resistance indicator
- Z-Winner CCI (period 16, level 30 ad 60) indicator
- Trend Strength indicator,
The strategy is optimized for the 4-hour time frame and enables the trader to trade short-term movements within any asset without undue exposure to market noise.
Four indicators are used for the strategy. Out of these four indicators, two are applied to the price charts directly, while the other two have their indicator windows. The indicators that are applied directly to the price charts are the 4h trader (arrow alert) indicator and the support_resistance indicator.
The modified Commodity Channel Index (CCI) indicator, also known as the Z-Winner CCI Indicator, comes with its chart window, with the oversold and overbought levels marked out. The overbought level is from 55 and above while the oversold levels from -55 to more negative values.
The other indicator that comfort zone indicator window is the trend strength indicator. This indicator comes with green arrows for the uptrend and red arrow for the downtrend. Depending on how brightly the indicator arrows shine, the trader can detect when the trend is an uptrend or downtrend.
The brightness/dimness of the arrows shows how strong that trend is. If the arrows are dim, it means the trend is not very strong. If the arrows are bright, then it means that the trend is strong. As the strategy is a trend-following strategy, only one set of arrows will show at a particular point in time to indicate if the market is trending upwards or downwards.
Indicators on the GBPUSD 4-hour Chart
To trade this strategy with a reasonable degree of success, some commonsense has to be applied. The first thing you will notice when all the indicators are set up is that the 4H Trader tends to throw up arrows at points where it is not advisable to trade. What do I mean by this?
You should be buying at a support and selling at a resistance. So if a green up-arrow comes up at a price area where there is no support line, you should be wary of accepting the signal at that point. Buying at a support line will produce more accurate results, as will selling at a resistance. These scenarios will be presented on the charts so you get a clear picture of this fact.
This is the 4H trader Advanced Trading System in Action.
Trading the 4H Trader Advanced Trading System For MT4
Here is the description of how to trade the two sides to this strategy.
- Long entry
These are the conditions that favour a long trade setup.
- 4H trader indicator (arrow buy) appears at, or is slightly above the support line.
- CCI indicator <30 level (i.e. it is oversold)
- Trend Strength up trend>50.
- Signals appear when there is a support trendline showing on the price chart.
This is how a complete long entry setup looks on the 4-hour chart. Usually the 4H Trader arrow gives an audio alert with a pop-up that indicates if the trader can buy or sell the asset. However, it is advised to take only trades that appear just above the support line.
Long Entry Setup
Take note of the chart, which shows several false signals as well as a single setup where all parameters aligned nicely. Let us examine them all to see how they met or did not meet the entry criteria.
The first setup showed the green arrow signal on the price candles. The CCI was in the oversold territory, but the trend strength signal did not meet our criteria. Furthermore, there was no support line. Even though the price headed upwards a little before it stalled, you would not know this in real-time. Therefore, the best would have been to avoid the signal entirely. The second set up showed that the CCI and the trend strength indicators did not meet our entry criteria for a long trade. Only the third setup met all our entry criteria. The CCI was in oversold territory, trend strength was 60%, and the green arrow signal appeared right at the support line.
4H Trader Advanced Trading System For MT4 - Stop Loss & Take Profit Settings
Set your Stop Loss (SL) immediately below the support line. The potential Take Profit target has to be placed a little below a prior resistance level or area. Try to ensure that you get a risk-reward ratio of 1:3. In a worst-case scenario, a risk-reward ratio of 1:2 is still ok.
2) Short Entry
- 4H trader indicator (arrow buy) appears at or below a resistance line.
- CCI indicator >70 level (i.e. it is overbought)
- Trend Strength downtrend >50.
- Red down-signal arrow appears when a resistance trendline appears on the price chart.
This is how a complete short entry setup looks on the 4-hour chart. Again, do not simply sell when the 4H Trader arrow gives an audio alert with a pop-up. Only trade when all four parameters align.
Short Trade Setup
On this 4-hour chart for the USDCHF, we see several arrow signals which did not fulfil the entry criteria. However, there was a single setup which met the criteria, even though the CCI was barely in the overbought region.
Stop Loss & Take Profit Settings
The Stop Loss (SL) is set slightly above the resistance line where the short trade entry was made. The Take Profit point should be set slightly above a price level where a previous support level resides. Once more, aim to take trades where you stand to make at least 3 pips (or 2 pips) for every pip risked in the stop loss.
Some other parameters can be used to exit the trades manually.
- Close the active trade when an opposite arrow signal appears.
- The original strategy prescribes precise exit points depending on the currency pair. Use 60 pips for the EURUSD, 55 pips for the AUDUSD and 50 pips for the GBPUSD and USD/CHF pairs. The GPBJPY pair requires 70 Pips as the TP. In these instances, always use a trailing stop to protect unrealized profits.
Download the complete system description and the files here:
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
