4-Hour Chart Positioning Strategy

by Thinus Briers | May 26, 2025 | Forex Basics, Forex Education

4-Hour Chart Positioning Strategy

This week I thought I’d look at a very simple 4-Hour Chart Positioning Strategy. This strategy could help you position in the direction of the dominant trend on the 4H chart, using structure, confirmation, and proper risk management. I’ve decided to post this week as my strategy hasn’t changed over the last few posts, i.e. A-grade trade areas are quite a distance away (most pairs have made significant moves recently), so I’m trying to use the 4-hour chart to try and get in on moves much earlier. Remember, I use this strategy in conjunction with my ‘normal’ M2 strategies.

1. Trend Identification (Bias Setup)

Use a 200 EMA to define the trend:
- Price above = bullish bias
- Price below = bearish bias
Confirm with a higher timeframe trend (e.g., Daily/Weekly)

2. Wait for Pullback into a Confluence Zone

Look for price to retrace toward the 50 EMA or a Fibonacci level (38.2%–61.8%)
Ideal if it aligns with a previous structure zone (support/resistance)
Give yourself visual flexibility with 10–20 pip zones.

3. Confirm Entry with Price Action

On the 4H chart, wait for a bullish engulfing (longs) or bearish engulfing (shorts), or a pin bar/wick rejection
You could zoom in to the 1H or 15min for tighter entry if scalping around position builds
Wait for the 4H candle to close for confirmation.

4. Risk Management & Trade Management

Stop Loss: Just below/above the structure or last swing
TP1: Previous high/low
TP2: Extended move based on measured move or key levels (e.g., Daily zone)
Risk per trade: 0.2 – 0.5%
Trail SL once TP1 hits or move to breakeven
Try and journal every trade!

Works Best When:

The market is trending cleanly (not choppy)
There is fundamental alignment (e.g., bullish USD + bullish trend on USD/JPY)

Thinus

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