Richard Donchian’s : The 4 Week Rule

Again, where is the complete sample code for this strategy? Comment by rog on July 20, 5: It is possible for two skilled practitioners to look at the same charts and disagree on the signals. What is the best method of analysis for forex trading? What is Forex trading market? This strategy will consistently be on the right side of all the big moves in a market. Check again the next day.

Known simply as the four-week rule (4WR), this is the exact system designed and used by Donchian. This strategy will consistently be on the right side of all the big moves in a market.

Using the Four-Week Rule

Simplicity and Profits for Over 30 Years. The system we are going to look at is so simple, most traders simply believe it can't make money but it does. The system has been making money since the late seventies, when it was first used on commodity markets and its still making big profits over 30 years later! If a market trends and currency pairs trend very well then this system will make big gains over the longer term.

In fact, you will NEVER miss any of the big trends which last for weeks or months again, if you learn this trading system. A Single Rule System. Its got a simple rule which generates trading signals in the market and it's simply this: Wait until a currency pair reaches a new 4 week high and execute a buy signal. Simply hold the position open in the market until a 4 week low is hit and then reverse the position from long to short.

You then simply keep doing this and always hold a position in the market — that's the rule. It;s a simple objective trading signal and very easy to apply. It's only one rule, based on price action and traders I show it to are always saying — its far to simple to work but it does work and can help you achieve Forex trading success.

So let's look at this simple Forex trading system which I consider the best I ever seen. Keep in mind, however, the 4 week rule works as well as any other trend-following system but with the benefit of incredible simplicity.

Andy Swan is co-founder and head trader for DaytradeTeam. To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here. Add to 'Articles to Read'. It should not be assumed that the methods, techniques, or indicators presented on these websites will be profitable or that they will not result in losses.

Past results are not necessarily indicative of future results. Examples presented on these websites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. There is a high degree of risk in trading. Another advantage is fewer trades, which means less time being spent looking at the market and finally you don't even need a computer!

Being a trend-following system, it is not going to catch market tops and bottoms but how many systems do that though? You might be saying that won't work — well go and try it on a strong trending currency market like the euro, Canadian dollar or Australian dollar and back test it and in a number of strong trending markets and you will see it does. Don't be led to believe that if its simple it won't work — all the best forex trading systems are simple.

Today, traders always like to trade something different or obscure but if you want a simple system, by a trading legend, that's hard to beat — try Richard Donchian 4 week rule It's been part of some of the true great traders box of tools and should be in yours to. Rajandran has a broad understanding of trading softwares like Amibroker, Ninjatrader, Esignal, Metastock, Motivewave, Market Analyst Optuma ,Metatrader,Tradingivew,Python and understands individual needs of traders and investors utilizing a wide range of methodologies.

Hello, thank you very much for great information. I am looking everywhere for Donchian strategy detailed rules but have not been able to find. Everything is just guidelines like above. Could you let us know where we can find these rules? I made a system like that, a Donchian breakout system that enters on day high and exits when it doesn't make a new high for 12 days. This keeps you in while the trend remains but doesn't give half the profits back waiting for a new low.

Your email address will not be published. The 4 Week Rule. The 4 week rule, developed by Richard Donchian, is one of the most successful systems tested by time. The 4 week rule is used primarily for futures trading but might also work in your stock trading system.

The Strategy

The 4 week rule is a simple price action trading system which is based on breakout methodology and the logic of a price action breakout trading simple is very easy to . The 4 week rule, developed by Richard Donchian, is one of the most successful systems tested by time. The 4 week rule is used primarily for futures trading but might also work in your stock trading system. Mar 27,  · The 4 week rule was developed by Richard Donchian and has been proven to be an effective base for many profitable trading systems. The original rules were used for trading commodities but can be used for other asset classes such as forex and stocks, the rules .