Why Must See Multiple Time Frames When Trading Forex
Before discussing how to use multiple time frames for forex trading, we need to know why you need to see multiple time frames when trading forex. During this time you may not have trouble analyzing market conditions with just one type of chart because you already have a lot of indicator tools and experience that is capable as a forex trader.
Okay now let’s discuss about the game that we call by opening BUY (LONG) or SELL (SHORT) positions so that you are also advised to learn more.
The rules of forex trading games are actually very easy, that is you see the chart of price movements of currency pairs and then open BUY or SELL positions only that. How are you ready to play, bro 🙂
Let’s look at the price movements of the GBP / USD currency pair with a 10 minute time frame on July 1, 2010 (7/01/2010) at 8:00 am GMT. We get 200 high schools acting as resistance.
When the resistance level continues to be tested by price movements and the formation of a doji, this shows us a good opportunity to open a SELL (SHORT) position.
But what is it? the resistance level is broken and the price continues to move upwards by 200 PIPS. Hmmmm actually what happens even if we look at using high school indicators, candlesticks, and resistance levels the price will tend to move strongly down but the reality is the opposite.
If you look at the GBP / USD chart in a 1 hour time frame you will see that the price is in the bottom position of the Ascending Channel and more a doji is formed below and this indicates a strong BUY signal.
And from the Ascending Channel indicator it is also clear to use a chart with a 4 hour time frame.
Now by looking at the above case, will you immediately open a BUY position when you only see it using a 10-minute chart?
All charts show the same price data but all have different time frames. For that we must ensure that all charts show the same signal? before making a decision in forex trading.
How about it Do you understand why you should look at several charts with different time frames when trading forex? if you understand, let’s discuss how to determine entry points and exit points using ml time frame.