When trading in Forex market it is recommended to decide on a specific time frame of a Forex chart and trade according to it only. Experienced traders use the time frames of 4 hours, 24 hours or 1 week. There are certain benefits and disadvantages for the high time frames. The bigger is your time frame, the more funds you have to put to your trading account because each trading position requires higher margin. But at the same time you have the prospect to make higher profits. The market’s behavior is more predictable for higher time frames but it may take you few days to find a good opportunity to enter the market. In this article we would like to share a strategy of trading in 4 hours time frame using the candle stick charts that can be found at all Singapore brokers
Pay attention that trading with 4 hours candle stick charts requires much patience and time. It may take you much time to find a good chance to enter the market and also from 12 hours to 5 days to keep a trading position. This technique is based on the trends that sometimes happen in the Singapore Forex market. The target is to enter the market in the beginning of the trend and leave it in the end of the trend. According to the strategy a trader must analyze the market and his open positions every 4 hours after the last candle in the 4 hours graph is finished.
Upon analyzing the market it is recommended to check the rates for the specific currency pairs for 4-5 days before on a 4 hours candle stick chart in order to see if there were some trends before or there is an opportunity for a potentially good downward or upward trend coming. The decision of opening or closing a trading order may be done only every 4 hours when the last candle is completed and a new one has begun.
If you notice that the last three candles show that the market is going up, this is a good signal to open a buy position. If at least 2 last candles go down, this is a situation for a potential downward trend and you can place a sell position. In order to reduce possible losses you can use such orders as take profit and stop loss. You can place a take profit order after 120 pips in case if the prices between the opening and closing of the market did not go over 80 pips for the last five trading days. If the prices exceeded 80 pips for the last 5 days, you can place the take profit order on 240 points.
We wish all traders good luck and invite them to share their opinions of Forex trading in Singapore.
Hassam 