FOREX THEORY
How to Do Multiple Time Frame Analysis to Find Better Entry
and Exit Points (Part 2)
You have to remember, a trend on a longer time frame has had
more time to develop, which means that it will take a bigger market move for
the pair to change course. Also, support and resistance levels are more
significant on longer time frames.
Start off by selecting your preferred time frame and then go
up to the next higher time frame.
There you can make a strategic decision to go long or short
based on whether the market is ranging or trending. You would then return to
your preferred time frame (or even lower!) to make tactical decisions about
where to enter and exit (place stop and profit target).
Just so you know, this is probably one of the best uses of
multiple time frame analysis – you can zoom in to help you find better entry
and exit points. By adding the dimension of time to your analysis, you can
obtain an edge over the other tunnel vision traders who trade off on only one
time frame.
Did you get all of that? Well, if you didn’t, no worries –
we’re gonna go through an example now to help make things a little clearer.
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