Forex Academy Suggests Whether Using Multiple Time Frames Is Suitable for Forex Trading
By Space Coast Daily // November 12, 2019
Forex traders should have a specific trading ritual that will help them make more money.
If you still don’t have a ritual, you should answer these questions below:
- Do you want better targets and stop losses and higher quality entries?
- Do you want more knowledge about the price action of a pair?
- Do you know the best setups that can help you earn more?
The one-stop answer for all these questions depends on how well you understand the concept of using multiple time frames. Forex Academy, a free news and research website on Forex recommends you to use multiple time frames for various reasons. If you know how to use multiple time frames, you can become a more profitable Forex trader.
Benefits of using multiple time frames
Why should you, all of a sudden start using multiple time frames in your trading routine? According to experts from Forex Academy, you need to learn about the difference between a single time frame and multiple time frames.
Forex Academy explains the importance of different time frames in detail, especially multiple time frames so that you can understand why this is so crucial for everyone.
- Interpreting current data
The primary reason why you should use multiple time frames is to interpret the current market condition. Price action traders usually rely on recent trading data to analyze how the market will work throughout the day and how it will close.
You also need to utilize the data by taking help from multiple time frames. In addition to checking the pairs regularly, you also need to consider other H4 candles.
Analyzing the candlesticks is essential to crafting your trading decisions. When you zoom out to see numerous candles on different time frames, it gives you an hourly, daily, weekly, and even monthly data of how the market worked.
Depending on which data you need, you can trade accordingly.
- Price movement
In addition to interpreting current trading data, you also get a context of the recent price movement. This will help to prevent bad trading decisions.
Emotional trading and overtrading can make you a beggar quickly. There are cases where you may get stuck analyzing a pair over two-time frames. This can be risky because two-time frames may provide entirely conflicting information.
When you use multiple time frames, you can successfully understand if the price is trending on a larger time frame, if there is any upcoming resistance, or if there is price pending available for a continuation.
- Accurate trading parameters
Forex traders understand the importance of targets, stop losses, and good quality entries. You acquire these skills as you become more experienced.
But the greatest skill of them all is using multiple time frames. They help you improve your ability to put better trade parameters. This will provide a concise picture of the overall price action scenario. Moreover, analyzing a single time frame won’t help develop your skills; multiple time frames will.
Different traders may have different strategies, but if you are eager to learn, you should remember these suggestions from Forex Academy. They will help you become a veteran trader quicker than you expect.