FOREX THEORY
Why You Should Look at Multiple Time Frames When Trading
Forex (Part 4)
The ascending channel would have been even clearer on the
4-hour chart.
If you had looked at this chart first, would you still have
been so quick to go short when you were trading on the 10-minute chart?
All of the charts were showing the same price data. They
were just different time frames of that same data.
Check out another example of multiple time frame analysis in
our forums.
Do you see now the importance of looking at multiple time
frames?
We used to just trade off the 15-minute charts and that was
it.
We could never understand why when everything looked good
the market would suddenly stall or reverse. It never crossed our minds to take
a look at a larger time frame to see what was happening.
When the market did stall or reverse on the 15-minute chart,
it was often because it had hit support or resistance on a larger time frame.
It took a couple hundred negative pips to learn that the
larger the time frame, the more likely an important support or resistance
levels would hold.
Trading using multiple time frames has probably kept us out
of more losing trades than any other one thing alone. It will allow you to stay
in a trade longer because you’re able to identify where you are relative to the
big picture.
Most beginners look at only one time frame. They grab a
single time frame, apply their indicators and ignore other time frames.
The problem is that a new trend, coming from another time
frame, often hurts forex traders who don’t look at the big picture.
 The ascending channel...){kind=link}
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