Analysing the 4-hour charts in Equity segment


#1

Would it be efficient to analyze the 4-hour charts in Indian equity segment for trading signals?

Since the trading hours in NSE equity are from 9:15 am to 3:30 pm, the candlesticks alternate between 4-hour (9:15 am to 1:15 pm) to an approx 2-hour (1:15 pm to 3:30 pm) timeframe. It isn’t a continuous series of activity snapshots every four hours. So, does use of 4-hour charts be of good use in equity segment for positional/swing trades?

Even with 1-hour charts, every 7th candlestick would only be a 15-minute activity snapshot (3:15 pm to 3:30 pm), how should one account for this in technical analysis?


#2

I would say you use 1 Day chart cause 4 Hour chart is quite fragmented as you have 1 candle and another half candle per day.

So for longer view use the Daily chart or 1Hr which is quite continuous…


#3

Thanks. I currently use the End of the day charts for taking positions for a day or two. But, I wanted to know under what context would the the 4 hour charts serve the purpose? Any traders here who use it? It would be great to know the pros & cons of using it.


#4

There are no such thing as a timeframe serving a purpose…

Traders choose different timeframe according to their trading style and strategy. Each timeframe is useful in that sense. So 4Hr might be useful for some trader looking for catching some good swings. But in general 4Hr doesn’t even have 2 full bars only one and a half or something bars so its better to use the daily instead.


#5

I do use 4 hour charts , 4 hour chart is very useful , in case of both long/short trading. it helps to hold the positions for few trading sessions , it helps to avoid intra-day gyrations.


#6

@TIMEFRAME Thanks for the response.

  1. In what ways do you find it more useful in comparison with an hourly chart or end of the day charts?

  2. Specific to Equity segment, since not every bar is not a 4-hour bar, doesn’t it hinder in the analysis of the trends?

  3. What segments do you use the 4 hour charts to trade?


#7

Well If you compare hourly chart and 4 hour chart , in hourly chart you can see more gyrations or whipsaws and makes us to exit or to enter prematurely , For example if you compare the INFY hourly chart & 4 hour chart from 7-1-2019 to 23-1-2019 ,( from level 670 to 763 ) hourly chart gave many sell signals/whipsaws ( Ex on 9th , 17th ) where as 4 hourly chart gave sell signal on 23-1, so if one used hourly chart , it made to take many trades , where as 4 hour chart allowed to ride the price moment from 670 to 763 in one single trade. In simple words 4 hour chart is helpful for positional trade .

For all segments.

It doesn’t, if line chart is considered , i don’t give much importance to the candle , i consider the closing price & its action near moving averages.