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Analysing Multiple Time Frame in Forex Scalping Day Trading and Swing Trading

Post on: 3 Июнь, 2015 No Comment

Multiple time frames analysis equals using 2 time frames to trade Forex currencies.

A shorter time frame the one you use for trading and
A longer time frame to check the Forex trend.

Since it is always good to follow the Forex trend, in Multiple Time Frame Analysis , the longer time-frame gives us the direction of the long-term trend.

If the long-term Forex trend supports the direction of the smaller chart time-frame then the probability of being profitable is greatly increased. This is because even if you make a mistake the long-term trend will eventually save you. Also if you trade with the direction of the trend, then mostly you will be on the winning side, this is what this analysis is all about.

Remember there is a popular saying by many Forex and stock market traders that says; The trend is your friend . In a nutshell it means never go against the market trend.

There are four different types of Forex traders: scalpers, day, swing and position traders. All these use different chart time frames to trade. The time-frames used by each type of trader are explained below.

Scalpers using on 1 minute chart, their long-term Forex trend will be determined by 5 minute chart.

Day traders using 15 minute chart, their long-term Forex trend will be determined by 1 hour chart.

Swing traders using on 1 hour chart, their long-term Forex trend will be determined by 4 hour chart.

Position traders using on day chart, their long-term Forex trend will be determined by the weekly chart.

Examples of how each type of Forex trader uses multiple time-frames analysis strategy to trade:

These are the traders that hold on to their currency trades for only a few minutes. The scalper never holds on to a trade for more than ten minutes. With the objective of making a small amount of pips, 10 — 20 pips.

Scalper multiple time-frame strategy

These are the traders that hold on to their trades for a few hours but not more than a day. With the objective of making quite a number of pips, 30 — 100 pips.