Forex Trading Charts Analysis
In today forex faq, I will be giving my suggestion for the following questions
Question 1: When going long or short, do I have to consider all the 60 minutes, 15 minutes and 30 minutes charts?
Question 2: I still can’t have the lines to show me positive and negative divergence on my MACD indicator, how do i do put them on?
For the first question, there is no right or wrong answer for this question. I have known traders who simply focus on 1 forex trading chart and then make money from it and I also have friends who are making use of the multiple time frames to trade.
Personally, I use multiple time frames in forex trading to increase my probability of getting into a winning trade. This is because a 60 minutes candle is made up of four 15 minutes candles. Therefore if I am trading off the 60 minutes chart and I am looking for an opportunity to go LONG (BUY), I can go and take a look at the 15 minutes chart to see if there is a chance to go LONG as well.
Since the higher timeframe is made up by the lower timeframe, the 15 minutes chart must first show some sign of up movement before the price in the 60 minutes will move up.
I feel that there is no need to look at all the 15, 30, 60 and 240 minutes charts at the same time as it will be very complicated and you will find yourself getting into a situation of analysis paralysis.
All you need is a chart that you are using to trade and a lower time frame chart that you can use for your entry. Do note that the key to trading is Simplicity, the more complicated you make your trading strategy to be, the less likely you are going to win.
Therefore it is not a MUST to be using several time frames in your trading. If you are able to identify important support and resistance, draw proper trend line and have a good trading plan on hand. One time frame is all you need to make money from trading.
As for your second questions on the divergence on MACD, are you saying that your platform only plot the histogram and do not show you the lines. In that case, you have to either ask your platform provider or simply change to one that can show you that. I am afraid I will not be able to advice you on this area.