At the beginning of the new week, would like to introduce to you traders a quite effective multi-timeframe trading strategy by combining the H4 timeframe with one of the smaller timeframes it relies on the signals of 4 technical indicators. very popular like: Bollinger Bands, RSI, ADX and 2 EMAs.

Before getting into the rules section, please note a few points

  • Time Frame: We use the following timeframe: H4, H1, M30, M15, M5 and M1.
  • Most setups will be searched on M1 but in some cases another timeframe can be used to find entry points.
  • Currency Pair: Any.
  • Technical indicators; Bollinger Bands, ADX, RSI, EMA 5 and EMA 10.

Trading principles

1. Use the Pivot Point indicator to determine the previous day's highs and lows, or you can also use the high, low and closing prices to determine.

2. Check out the H4 chart to identify the overall trend. When the 5 EMA is above the 10 EMA, the RSI is above the 50 level and the +DI line is above the –DI and the ADX is above the 25 level, it shows that the market is in an uptrend and opposite to the downtrend.

3. After identifying the trend on H4, go to the M1 frame and wait for Bollinger Bands to expand and break with the trend on H4. Note that all indicators like EMA, RSI and ADX must have signals before you can trade with Bollinger Bands.

4. If it is a buy signal, you need to wait until Bollinger expands to the upside and then look for the candlestick with the highest price or close at the table above the Bollinger Bands indicator. Then place a buy stop order about 2 pips from the high of that candle after it closes. And same with sell order, wait until Bollinger Bands widen to the downside, then look for the lowest price candle or close that forms in the lower band of the indicator, now you place a sell stop 2 pips below that candle after it closes.

5. If using M5 or other frames, the usage is similar. We need to wait for Bollinger Bands to break out of the trend above H4 before finding an entry point. Only the profit target part will be different. For the M5 bracket, the target would be around 30 pips. M15 frame, target is around 40 pips. For the M30 bracket, the target is around 50 pips. For the H1 frame, you can set take profit at the top or bottom or by the nearest resistance.

Buy setup example

Below is the chart of the GBPUSD pair H4 frame.

As shown above, point A is the information about the pivot points of the pivot point indicator. Point B is when the EMA5 crosses above the 10 EMA. Point C is when the RSI is above 50. At point D, the +DI line has just crossed the –DI line and the ADX is also above the 25 level. At this point, the trend has been determined. The current trend is turning to an uptrend, now we look for buying opportunities when the highest price candle or close price forms in the upper band of the Bollinger Bands indicator.