Trading With Three
Time Frames
Here at the
BabyPips.com School of Pipsology, we like using three time frames. We feel that
this gives us the most flexibility, as we can decipher the long, medium and
short term trends.
The largest time
frame we consider our main trend – this shows us the big picture of the pair we
wanna trade.
The next time frame
down is what we normally look at, and it signals to us the medium term buy or
selling bias.
The smallest time
frame shows the short term trend and helps us find really good entry and exit
points.
You can use any
time frame you like as long as there is enough time difference between them to
see a difference in their movement.
"If your plan isn’t working, adjust your plan. Never
give up."
By Matt Martin
HOW ACCURATE ARE YOUR SIGNAL PREDICTIONS?
We are absolutely confident of our trading system that we
endorse it with a MONEY BACK GUARANTEE! (Terms and conditions apply).
"Footprints on the sands of time are not made by
sitting down."
By Unknown Author
How to Perform Multiple Time Frame Analysis (Part 5)
As it turns out, the uptrend continues, and EUR/USD
continues to rise up the charts.
Cinderella would have entered just above 1.2800 and if she
had kept the trade open for a couple of weeks, she would have made 400 pips!
She could have bought another pair of glass slippers!
There is obviously a limit to how many time frames you can
study. You don’t want a screen full of charts telling you different things.
Use at least two, but not more than three time frames
because adding more will just confuse the geewillikers out of you and you’ll
suffer from analysis paralysis, then proceed to go crazy.
Is there a wrong way to do multiple time frame analysis, you
ask? Some of our forex friends have been nice enough to give their two cents on
this matter through this forum thread on multiple time frame analysis. At the
end of the day, it really is all about finding what works best for you.
"If you set goals and go after them with all the
determination you can muster, your gifts will take you places that will amaze
you."
By Les Brown
"There are two mistakes one can make along the road to
truth. Not going all the way and not starting."
By Buddha.
How to Perform
Multiple Time Frame Analysis (Part 4)
So now Cinderella
is locking her eyes in on the 15-minute chart, and she sees that the trend line
seems to be holding pretty strongly. Not only that, but stochastic are showing
oversold conditions on the 15-minute time frame as well!
She figures that
this could be a good time to enter and buy. Let’s see what happens next.
"All good is gained by those whose thought and life are
kept pointed close to one main thing, not scattered upon a thousand."
By McKenna.
How to Perform
Multiple Time Frame Analysis (Part 3)
Once she goes back
down to the 1-hour chart, Cinderella sees that a doji candlestick has formed
and the stochastic has just crossed over out of oversold conditions!
But Cinderella
still isn’t quite sure – she wants to make sure she has a really good entry
point, so she scales down to the 15-minute chart to help her find an even
better entry and to give her more confirmation.
"The worst thing that happens to you may be the best
thing for you if you don’t let it get the best of you."
By Will Rogers.
"Up, sluggard, and waste not life; in the grave will be
sleeping enough."
By Benjamin Franklin.
How to Perform Multiple Time Frame Analysis (Part 2)
She sees that the pair is clearly in an uptrend.
This signals to Cinderella that she should ONLY be looking
for BUY signals. After all, the trend is her friend, right? She doesn’t want to
get caught in the wrong direction and lose her slipper.
Now, she zooms back to her preferred time frame, the 1-hour,
to help her spot an entry point. She also decides to pop on the
stochastic indicator.
"Celebrate what you want to see more of."
By Thomas J. Peters.
"Action is the foundational key to all success."
By Pablo Picasso
How to Perform
Multiple Time Frame Analysis
Let’s say that
Cinderella, who gets bored all day cleaning up after her evil step sisters,
decides that she wants to trade forex.
After some demo
trading, she realizes that she likes trading the EUR/USD pair the most, and
feels most comfortable looking at the 1-hour chart. She thinks that the
15-minute charts are too fast while the 4-hour take too long – after all, she
needs her beauty sleep.
The first thing
that Cinderella does is move up to check out the 4-hour chart of EUR/USD. This
will help her determine the overall trend.
