In a recent post I asked if you wanted some tips on trading eight hour charts in Forex. The response was astonishing. The post received over 100 comments from readers wanting to learn eight hour charts.
In this post I am going to set a one month challenge with the goal of making you a more efficent trader.
How I Started Trading Eight Hour Charts
Traditionally mid-range timeframe Forex charts have been limited to four hour and daily. However, in the last few years some brokers have introduced new timeframes to their platforms.
I first found out about eight hour charts in early 2012. One of my advanced course students suggested the timeframe to me. At first I was hesitant about breaking away from four hour and daily time frames. After testing the eight hour time frame for a few weeks I fell in love.
Why Eight Hour Charts?
One of the major benefits is that they save your time. Eight hour charts only need to be checked every 8-12 hours, making it is easy to trade them around a busy schedule.
You may be thinking that the daily charts save even more time, and you would be right. However, daily charts have far fewer trade setups than eight hour charts. Eight hour charts strike a good balance between time saved and quantity of trade setups.
How to Get Eight Hour Charts
The easiest way to get eight hour charts is to download MT5 from the official MetaQuotes site and get a demo account. Unfortunately many brokers are still using MT4 which does not have eight hour charts. There is an MT4 plugin which allows eight hour charts but it does not work for a lot of people. If you want to give the MT4 plugin a shot check out this recent post.
Simple Trading Challenge
Now that you know a little about eight hour charts and how to use them I want to give you a challenge. The challenge will run for a month, and your goal will be to simplify your trading and to develop some efficiency.
Step One: Choose Four Pairs
Trade Four Pairs Efficiently
Normally I tell new traders to pick a single pair and stick with it. However, this challenge is designed for people with limited trading time. Multiple pairs are required for this challenge to maximize your chances of catching a trade.
I will be trading EUR/USD, GBP/USD, AUD/USD and EUR/JPY.
Step Two: Choose One Time Frame
This part is obvious, you need to choose the eight hour time frame. Create an eight chart for each of the pairs in step one.
Step Three: Choose a Trading Strategy
I recommend you use my simple Forex strategy. I use a combination of support and resistance and candlesticks to trade reversals. Generally, I get two to four setups per week across the four pairs in step one.
If you already have a working strategy, feel free to use it. This challenge is all about making you a more efficient trader. If your strategy works but you miss trades, you can adapt the strategy to fit the parameters of this challenge.
Step Four: Create a Trading Plan
You should already have a trading plan. If you don’t, you are making a major mistake. If you already have a trading plan you may simply need to adapt it to this challenge. If you need help creating a trading plan check out my free trading plan and money management course.
Step Five: Start Trading
Once you have your trading plan it is time to start trading. The challenge is simple. You need to limit yourself to four pairs on the eight hour time frame. You should try to check your charts once every eight hours. If you cannot manage to check your charts that often try to check at least once every twelve hours.
If you see a trade set up, trade it. Feel free to use automatic entries and exits if needed.
I am hoping that this challenge will allow you to trade more efficiently. Checking your charts once every eight hours should allow you to fit trading around a busy schedule.
Eight Hour Chart Tips
Over the next few weeks I will be writing a lot about eight hour chart trading. So keep an eye out for some more tips that will help you in this challenge.
Taking part in this challenge? Leave a comment below and let me know!
