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Multiple Time Frames Strategy in Forex Trading

Whether you are a beginner at forex trading or not, you will most likely come across the multiple time frame strategy at some point in time especially if you have taken up market education. Nevertheless, there are still some who forget this analysis, which is actually the foundation of getting an edge at reading charts and creating one’s strategy. Multiple time frame technique involves you knowing how to choose your means of analysis for different periods and how you can put all the gathered information together.

Guidelines

Multiple time frames are considered as an analysis in which a trader will have to monitor the currency pair that he focuses on according to the time compressions. This may seem easy but to succeed with this forex strategy, you need to know the general guidelines that you should follow. First, you will need to use three frequencies so that you can get enough information on the market. Any number less than this will result to you losing a considerable amount of data but using more will cause redundancy in analysis.

This is a good strategy wherein you should determine the medium term period that would represent the standard average on how long the trade will hold. Next, you will need to decide on the short term period but it should be one fourth of the first time frame. For instance, if your medium term is 60 minutes, your time frame for the short term period will be 15 minutes. Now, when you are done determining what your first two time frames are, you can proceed with the long term one. Calculate it and it should be four times larger than the first one in the minimum. So, if you have 60 minutes, it should be at least 240 minutes for the long term time frame.