Institutional traders often place their trades after a new H4 candle opened. Gives you a lot of momentum if you get a nice 2nd dot entry.
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The name of the H4 Open line is called "Hooligan"
1. Relevant for institutional traders
Many institutional traders (banks, hedge funds, etc.) refer to the 4-hour chart because it provides enough information to anticipate larger market moves without too much noise from smaller timeframes (like M1 or M5). This makes the H4 timeframe an important reference point where larger market participants often become active.
2. Market structure on a medium timeframe
The H4 timeframe reveals key support and resistance levels, which are often crucial for determining the direction of the trend. These levels are closely watched by market participants, so you often see significant movements or trend reversals near H4 candles.
3. Interactions between large and small timeframes
When you observe the opening of a new H4 candle on the M1 chart (1-minute chart), you often notice momentum changes or even trend reversals. This happens because a new H4 candle brings fresh information for all market participants, often leading to a reassessment of the market situation. When institutional traders open or close positions, it reflects in increased momentum or trend changes, which are especially visible on the M1 chart.
Conclusion:
H4 candles are critical because they capture key market structures, institutional interests, and time zone shifts in the medium term. This makes them often signal points of trend reversals or momentum acceleration. On smaller timeframes like M1, this becomes especially noticeable as short-term momentum shifts quickly when a new H4 candle begins.
