Hi,

I received your 4-hour method.
I find it quite interesting as it seems to simplify all
of the occurrences which happen at the significant time pivots, which include the important rollover periods.

Interestingly, you mention having problems recently with GBP/JPY –my favorite!
I did not take the trade you entered short,
even though the indication was short. That particular pair
had a bad "progeny" — what preceded it in terms of a pattern was a "hybrid". Something that looks like a clear-cut trend that can be entered, but is really a "trending consolidation" with narrow ranges which can be treacherous
and really can only be traded with a 5-minute bar or not at all. And it has been this way for quite awhile and may continue to be so for awhile.

Apparently, in your trading you utilize a 4-hour chart with two EMAs.

Question: Are you essentially willing to accept drawdowns?
How timely can an entry be at the cross of two EMAs in the
4-hour bar? Surely you must utilize a 5-minute bar after
you determine where the cross may be anticipated in the
4-hour study? Especially so in a pair like the pound/yen
where the drawdowns can be troublesome. How do find a tight, timely entry point using the EMA cross in a 4-hour bar? Can I look for the answer to that question on your
website or perhaps you can email me?
Notwithstanding, the 4-hr bar offers benefits that the other
timeframes do not. I like your method. But I have this particular question which perhaps you would address, as you
seem so certain that the 4-hour bar can be considered a
standalone entity. If it can, what are the conditions you
employ to make it stand alone outside of two EMAs crossing?

Kindest regards, Mike

Hi Mike,

I do actually use the 4 hour chart in isolation. After the crossover occurs I always look for a slight pull-back and try to enter a position close to the EMA(5), which has always given me good results overall.

Dear James,

Thank you for your timely response to my question.

You mention that you wait for a slight pullback after the
two EMAs cross in the 4-hour study. How do you determine
what a slight pullback actually is in the context of the
isolated 4-hour bar? And how can this be more effective and
less risky than utilizing a 5-minute bar for entry purposes into the anticipated 4-Hour juncture?
Again, your 4-Hour method is quite credible and compelling.
But can you please directly address my issue regarding
tighter entries utilizing the more timely 5-minute study at the junctures where a cross in the 4-hour bar is anticipated — instead of risking a less timely pullback entry that can present itself just using an isolated 4-hour bar. How do you determine the nature of the pullback you refer to utilizing an isolated 4-hour study?

Kindest regards, Mike

James,

Sorry. I overlooked something in your last reponse.
You mention that after the pullback occurs in the 4-hour study you look for something in terms of 'being close to the 5 EMA'? What do you actually mean by that in the context of an isolated 4-hour bar?

Again, thank you for your patience and goodwill.

Best regards, Mike

You may be right that a 5 minute entry may be more effective but in my opinion it's just as easy to enter when the price is close to the EMA(5) on the 4 hour chart.

If it's not broke, don't try and fix it, etc.

Although the EMA(5) is a lagging indicator, it's still easy to enter a position at roughly the right time, particularly after you've seen thousands of these crossovers take place in the past.