I used shush/pat initially but then realised my DS didn't get on well with patting (may have aggravated his silent reflux which I didn't know he had at the time) so switched to a shush/rub and also used rocking in arms (following Harvey Karps 5s method, there are videos on-line the rocking is small in most cases almost like a little vibration, like being in a car - and also following Tracy's BW advice that if you are going to rock in arms standing up then rock forward and backward rather than side to side), when I put him down I used rocking in the cot by using a firm hand and creating a little rocking or vibration (not shaking). I reduced the rocking/firm hand in the same way as you reduce patting. If you feel that might be helpful for your LO go ahead, I know others have used rocking too - the key is to remember your goal is to use it to wind down and sooth when needed but not get locked into holding in arms rocking for a full nap unless you are purposely doing so for a reason (APOP accidental parenting on purpose).
I introduced a lovey the day he was born, a muslin square on my shoulder every time I held him. Used it to wipe his face at feeds and burping, always held one between us or near his face so he knew it was there during every cuddle, every wind down for sleep etc etc. He attached well that way because he associated it with me. In the early days I did not leave it with him unattended in a cot (SIDS risk prior to 6 months) but when he started using it to self settle I let him have it to fall asleep, I left the room and went back in 3 mins later to remove it. Over time I observed his ability to control it and at around 6 months I felt he was safe to have one in his bed for naps and nights. He also used 2 as bibs when eating solids (one around upper body/neck and one on his lap for dropped food) and every time he had a bump or upset I always held a muslin on me during the cuddles, I wiped his teething dribbles with one, I froze a damp one for him to chew when he was teething too. Basically we constantly had a muslin with us awake or asleep (I had a zillion of the things so they were always clean and he attached to the clean smell too).
4 months is not too old to try to introduce a lovey of your choice such as a muslin. Older babies will choose their own lovey but he is still quite little. I think if you did similar to what I've described, using that item *all the time* as though it is filled with powerful soothing magic then it will power up with comfort until eventually it offers comfort without you being there (or additional comfort). For example if my DS has a bad fall now I might get to him in a flash but my cuddles are not enough, he needs the muslin too, it has that much power! Some people keep a lovey item in their own clothes and sleep with it for a few night before introducing it to LO so that the smell of Mummy adds comfort but like I said I never did that, he hooked on the clean laundry smell which suits me just fine

I'm wondering weather I should transition him into cot as I would have had the moses basket for the next couple of weeks to familiarise with new surroundings and then approach again.
Do you mean put the basket in the cot? That's a good way to make the move as LO has a chance to get used to the change of view from their sleeping position but then have the safety of the known environment with the basket.
We had an a time of just over 2 hrs which was giving decent naps. Should I reduce when trying to learn self settling.?
I wouldn't reduce the A time because it's really hard to fall asleep unless tired enough, you don't want to set of an UT nap as LO will find it hard to sleep. I'd suggest a good wind down and then put awake but help him to get to sleep if needed, then help less as he learns to self sooth. For this though you will need to find a comfortable position for yourself so you are able to be hands on without causing you too much strain or pain.
hope that helps