Now, if you already know why you have to look at charts with multiple time frames, now is the time to find out how to open trading positions using multiple time frames, especially to determine the entry points and exit points that are very good, resulting in maximum profit.
Before we proceed to the topic of discussion we need to remember again that charts with a long time frame have more time to continue to grow, meaning that it forms a trending as well as the support and resistance levels that are formed will be more significant to hold.
To start trading using multiple time frames, do this first thing, which is to choose the type of time frame that you will use as a trading reference, then open a trading chart that has a longer time frame to see the potential movement in a longer period of time.
Or to make it easier, it’s a time frame that you are slower to use to determine the trading range and time frame that you use faster to determine the entry and exit position.
If you are still confused with the explanation above, don’t worry because the following below is an example of its application.
Let’s take the example of the price chart movement of the EUR / USD currency pair. After you read the previous article about multiple time frames and try trading with a DEMO account you decide to choose a 4 hour chart as a reference for forex trading. And when looking at the EUR / USD price chart you see that moving prices tend to be uptrend.
When you use a 4-hour chart to determine the trend you find the fact that the market conditions are indeed an uptrend and the right time to open a BUY position. And so that you are not wrong in determining the trend and get a loss because of that then you also open a more detailed chart that is an hourly chart and uses the stochastic indicator as the confirmation tool.
And you find the fact again that the doji is formed and the stochastic indicator shows a cross point indicating an oversold condition.
But to make sure that you really enter (ENTRY POINT) with the right level, you can open the chart that moves faster, ie 15 minutes chart.
You again find the fact that a strong price defense is formed and the stochastic indicator shows oversold market conditions.
And your decision is to open a BUY trading position because all the charts and the stochastic indicator show it is time to LONG / BUY against the EUR / USD currency pair and what will happen next.
Hmmmmm it turns out that what you see is true the price continues its strong movements a few weeks and you can carry 400 PIPS.
How about it it’s easy not even though in reality it’s easy and the hardest thing is to convince yourself that your decision is correct or not.
The number of time frames you will use can be 2 or more and of course you need the help of other indicators to confirm that all your decisions are correct.