Saturday, October 21, 2017

Questions on Multiple Time Frames Trading

October 30, 2015 by  
Filed under Forex FAQ & Latest Post

In today forex faq, we have a question regarding the usage of multiple time frames in trading from one of our fellow readers.

Below is the question:

Hi Kelvin

I am trading on the 4 hour, hourly and 15 minutes chart at the same time and I am trying to trade when the 3 time frames show the same signals but I hardly have 1 signal to trade every week.

Can you advice me more about this issue.

It is definitely good to trade using different time frame but the way you use it has caused you to have very limited number of trades per month.

I will not advice you to trade whenever the 3 time frames show the same signal. Frankly speaking, you can go without a trade for weeks or even months if you trade in this manner.

For me, I am also using multiple time frame in my trading but I only use it to tell the overall trend of the market as well as identify major support and resistance levels.

By scanning the higher time frame to the lower time frame, it can gives me a better picture of the market trend at the moment. If most of the time frames are showing sign of an uptrend, then I will zoom down to the 15 minutes to look for BUY trade.

Besides using multiple time frames to look for overall market trend, I also uses them to find level of strong support and resistance. Do note that the support and resistance on the higher time frame has more power than the support and resistance on the lower time frame.

Therefore I have the habit of spotting support and resistance on those higher time frame and then draw them on my 15 minutes chart as a reference.

What I suggest you to do is to use the higher time frame to come out with a BUY or SELL signal and then you move down to the lower time frame to look for entry signal based on the BUY or SELL signal on the higher time frame.

For example, if you find the price hitting a major resistance on the 4 hourly. What you can do is to move down to the 15 minutes time frame to look for a SELL trade opportunity.

The confirmation from the higher time frame will give the trade a higher probability of winning. However I am not saying that you will win all the time with this technique.

In order to be profitable from this technique, you will need to have a good trading strategy on hand in order to be able to profit from the market movement.

For those of you who do not have a working strategy on hand, I will recommend you to formulate one yourself or learn from anyone you trust.

If you are interested in formulating your own strategy, you can take a look at this blog post that I have posted sometime ago.

I hope that I have answered this question and do feel free to give you comment below


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