• timelinx

Why it is important to use more than one timeframe when trading forex

Updated: Feb 6, 2019

When you are too close to a situation you need to step back and get a little perspective. This is the exact problem that one timeframe traders face.

By focusing on the specific details of just one timeframe, they miss the overall view.

It is nearly impossible to make consistent profits trading on just one timeframe, however it is possible to be profitable by trading on smaller timeframes whilst looking at market action on the larger ones, providing that a solid and reliable method for understanding these timeframes is being used.

For example, a fantastic sell setup on a five minute chart is likely to end up in a loss if the 15 minute chart indicates a buy setup, or an excellent buy set up on a 30 minute chart will be unlikely to generate profit if the 1 hour chart indicates a sell.

The main reason for looking at multiple timeframes is to monitor trends and to clearly identify the presence of - or lack of - a master or true trend.

A master trend exists when either a clear uptrend or a clear downtrend is present on all or an incremental number of timeframes and conversely a master trend breaks when any of the timeframe trend directions falls out of sync with the others.

Identifying the emergence of a master trend allows savvy traders to enter positions ahead of everyone else when the risk to reward ratio is ideal.

Identifying the breaking of a master trend allows savvy traders to exit positions either in profit or loss and prevent loss or further loss accordingly.

Quantix is an exceptionally good indicator for identifying master trends.

#forex #timeframes

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