Website : Four Hour Trader Website
Publisher : John Campbell
Cost : $99 via Clickbank
Review Date : July – September 2011

WHAT IT SAYS ON THE WEBSITE

John Campbell will be familiar to SFT members. He is the guy behind the DOW Trader and Sane FX trading systems. Here are the links to our original reviews from early 2010, DOW Trader Review and Sane FX Review, respectively.

Four Hour Trader, is one which is based, as the name suggests, on the 4 Hour time-frame only. The system evolved from, amongst other, the previous mentioned Sane FX and DOW Trader systems and follows the same principles in that an indicator (arrow and MT4 alert) tells the trader when to Buy or Sell.

The system is designed to trade EURUSD, Gold and the DOW. There is a $49 upgrade available which means Oil can also be traded, we did not take this upgrade option.

For a “few hours a day in the vicinity of (your) computer” you can expect “maybe ten trades a week” and “an easy 1000+ PIPs a month”. Average Take profit is 100 PIPs with the average Stop being 70 PIPs.

Charts for March 2011 across the 4 instruments, EURUSD, Gold, DOW and Oil illustrate all trades dictated by the strategy. Results being positive for all 4 instruments during the period.

A minimum $2,000 Trading capital is recommended as this is a “serious system for serious traders”.

Four Hour Trader is a Clickbank product and comes with a 60 Day Money Back Guarantee.

THE MATERIAL

A simple and straight forward 19 page manual, an MT4 template and indicator.

The strategy is simple (Long for a Buy arrow/alert, Short for a Sell arrow/alert) and is easily explained in the short manual, as is the installation process. We used our Smart Live Markets account - Spreadbetting, Forex and CFD Trading with Smart Live Markets (where we can Spread bet directly from our MT4 charts) and simply installed the template and indicator to the appropriate directories. Restart MT4, open a 4 hour chart for each instrument (EURUSD, Gold and the DOW) and apply the custom template.

Stops and Targets are fixed with 1 lot being traded for EURUSD and 2 being traded for Gold and the DOW.

THE SYSTEM

Entry is executed at current market price on close of the 4 hour candle the alert is issued for. On exception is a check for “large candle” but apart from that Entry is 100% mechanical. Stops and Targets are fixed.

Some trade management is required. Open trades are exited and new trades are opened when an opposing signal is issued and, for Gold and DOW, the Stop for the 2^nd lot is moved to breakeven when the 1^st target is hit. These rules do mean that being around for each 4 hour candle close is important.

We applied no discretion, we took every signal (it is mentioned in the manual that this is an acceptable approach). Risk:Reward is 1:1.67 for EURUSD and 1:2.14 for the other two instruments.

We risked 2% per trade meaning at any one time our maximum risk in the market was a potential 6%.

CAN IT WORK

We took all signals we were around for on the FXCM platform as recommended. If there was a signal overnight when we were asleep we simply calculated the Trade details for review purposes.

Our results were as follows:

Common Parameters

• Time period / Time-frame = 3 months / 4 hour
• Time Traded = Ideally, every 4 hours
• Risk Per Trade = 2.00%

EURUSD

• Number Of Trades / Winners / Losers = 32 / +12 / -20
• Percentage Of Profitable Trades = 38%
• Average Winning / Losing Trade = +3.33% / -1.70%
• Profit Factor (Gross Profit / Gross Loss) = 1.18
• Largest Drawdown = -12.03%
• Average Per Month Return = +2.00%

Gold

• Number Of Trades / Winners / Losers = 17 / +9 / -8
• Percentage Of Profitable Trades = 53%
• Average Winning / Losing Trade = +2.59% / -1.84%
• Profit Factor (Gross Profit / Gross Loss) = 1.58
• Largest Drawdown = -4.00%
• Average Per Month Return = +2.85%

DOW

• Number Of Trades / Winners / Losers = 26 / +15 / -11
• Percentage Of Profitable Trades = 58%
• Average Winning / Losing Trade = +3.14% / -1.69%
• Profit Factor (Gross Profit / Gross Loss) = 2.53
• Largest Drawdown = -4.00%
• Average Per Month Return = +9.50%

Poor results for EURUSD and Gold were more than compensated for by a very respectable performance on the DOW.

It’s a system (like the other two mentioned previously) which does seems to have some merit and the only downside is the fact it’s traded solely on the 4 hour chart. It means, realistically, having to be around every 4 hours. We missed over 30% of the trades reported above because we were not around for the 00:00 and 04:00 candle close at all times.

SUPPORT

We had no reason to contact support.

CONCLUSION

PROs

• Easy to set up (on MT4).
• 100% mechanical.
• Reasonable performance when taking performance across all 3 instruments into consideration.

CONs

• Having to be around at all 4 hour candle close times is an issue.

Do remember, your comments are important, if you decide to purchase this system, please support us by using our link and by reporting back your findings, both are valuable to us and the service.

Review Team, will you continue to use this and report back?

We are actually still monitoring and we will report back yes.

100% mechanical - sounds like it would be a good candidate for an EA... Hmmm...

Review Team,

This sounds interesting, but as I have to sleep some time I wouldn't be able to check all the candles, mostly the 16:00 one as things currently are, also 20:00 and 00:00 may be a problem at times.

I'd be grateful for your views as to whether you feel this would put me at a distinct disadvantage with trades on any of the instruments you have reported on, thanks.

Hi macintel,

We did a quick scan across the 3 instruments, as we did previously, for your candles, we included 16:00 - 00:00. Not much in it but we would say probably a higher percentage of missed trades than us based in the UK, about 40%+ perhaps.

One thing we were going to mention in the initial review was that this product may be of greater interest to a group, of at least 4 traders (to cover illness, holidays, etc.) across different time zones.

Reasons we did not mention this previously; is this such a great product to be worthy of that consideration, are there not more feasible ways for individuals to trade for a living, based on our experience this is also not an easy thing to arrange financing wise, demographically, legally, trust wise, etc.

Your thoughts on the above would also be welcome.

Thanks Review Team,

In the long term, it may be possible to set something up, preferably using spread betting to avoid any tax complications. However, the issues you've identified would need to be addressed.

I can give it some thought, but in the short term I'm waiting for the exchange rate to improve before I find somewhere more suitable to live. If nothing positive happens in the next few months, then I'd consider relocating in Thailand (2 hours closer to the UK than Japan).

If I was to concentrate solely on the Dow, can you please tell me what the percentage of missed trades would be, and how it compares with yours. I consider the EU and gold may be a bit problematical at present due to the current situation. Thanks.

Hi,

Here is the breakdown for the DOW:

0:00 - 16.13%
4:00 - 19.35%
8:00 - 16.13%
12:00 - 9.68%
16:00 - 22.58%
20:00 - 16.13%

Hope it helps.

Thanks Review Team,

In view of the fact I'd probably be missing the most significant Dow candle of the day and the UK clocks change soon, I'll shelve it until I'm in a much better situation.

You are welcome and your input does support the issue that one really does need to be able to trade every 4 Hour candle.