Traders often get confused to select the time-frame and recklessly hunting for signals on time-frames. Here is the Forex Multi-time frame trading strategy every trader should know.
07 April, AtoZForex – When I started trading I often get confused to choose the best time-frames and usually stick to one time-frame. But after the long trading experience, I came to know that I was wrong. After interviewing various traders I came to know that, they pick the one time-frame and never leave it. Which is wrong!!! Or they go down to lower time frame to find more trade opportunities. I also analyzed that the best way to approach trading is with the Top-down approach.
Forex Multi-time frame trading strategy
If you are using the bottom-up approach
Using Top-Down approach during trading is the mush more profitable way of analysis because you start with the broader view and moves towards lower time-frames. Analysis multiple time-frame for a currency pair is a bit more difficult than sticking with one time-frame. But it helps to minimize the risk and helps you to analyze the potential market direction.
It generally gives you the big picture of the currency pair and tells you where are we overall. Moreover, it also tells you the important price areas ahead. For the weekly time-frame chart, long-term support and resistance levels should be marked.
Currency pair- EURUSD, Time frame- Weekly
After you analyzed the weekly time-frame moves towards the daily time-frame which is the big picture II. Daily time-frame tells you the long-term trend and the important levels ahead for this week. Moreover, again draw the support and resistance lines and check the moving averages for intraday trading.
Currency pair- EURUSD, Time frame- Daily
At the last, the 4-hour time-frame tells you the potential profits and good areas for your targets and stop loss. Moreover, you also get to know what has to happen before you enter the trade.
Currency pair- EURUSD, Time frame- H4
Staying open minded
Always stay open-minded while trading in Forex market. Also, create a long-term and short-term strategies when doing multiple time-frame trading strategies. This will avoid narrow-minded approach while trading and improves your three-dimensional thinking.
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