The so-called “time frame mashup” is to analyze multiple time frames or different time frames. This means that we will teach you how to do not only focus on your preferred trading time frame, but also a longer-term time frame and a shorter-term time frame. Only in this way can you win in trading.
Are you ready? Are you sure you can do this? You have studied half of this series of courses, and you don’t want to give up, do you?
First of all, you should have an overall grasp of the market’s operation.
Don’t put your face too close to the market, you need to keep a distance from the market.
You must remember that a certain trend in a long-term framework takes longer to form, which means that changes in exchange rate trends require greater market fluctuations. At the same time, the support and resistance levels are more stable in the long-term time frame.
After choosing your preferred time frame, you should pay attention to price movements in a longer time frame.
On longer time frame graphs, you can make corresponding long or short decisions based on whether the market is trending or interval running. Later, you turn to your preferred time frame (or shorter time frame) again to determine your entry and exit strategy (set stop loss and profit targets).
As you know, this is likely to be the best way to use multi-time frame analysis-you can determine your entry and exit points by analyzing short-time frame graphics. With the analysis of longer time frame graphs, you can get a broader trading perspective that traders who only focus on a single time dimension cannot get.
Do you understand? If you haven’t understood it yet, it doesn’t matter, we will give you examples to help you understand things more clearly.
Have you heard the story of Cinderella? Suppose that Cinderella is tired of cleaning her home every day and decides to start trading foreign exchange.
After a period of simulated trading, she realized that she likes trading EUR/USD the most, and she is also most willing to trade on the 1-hour chart. She thinks that the 15-minute chart changes too fast, and the 4-hour chart changes too slowly-after all, she needs enough sleep to keep her beautiful appearance.
The first thing Cinderella did was to observe the Euro/USD 4-hour chart. This will help her determine the overall trend of the exchange rate.
She found that the euro/dollar is in a clear upward trend.
This signal indicates that all Cinderella has to do is find a buy signal. After all, the trend is her best friend, right?
Now, she is back to her personally preferred time frame-the 1-hour chart, which will help her determine the entry point, and she will also use the stochastic indicator before making a trading decision.
When Cinderella opened the 1-hour chart, she found that the euro/dollar had formed a doji, and the stochastic indicator had formed a golden cross in the oversold area!
However, Cinderella is still not very sure-she wants to make sure that she has found a good entry point, so she turns on the 15-minute graph to help her get a better entry point and give her more Confirmation information.
Now, Cinderella focuses all her attention on the 15-minute chart, and she finds that the trend line is quite stable. Not only that, the stochastic indicator is also oversold on the 15-minute chart!
From this, Cinderella concluded that this might be a good buying opportunity. Now, let us see what happened next.
As you will see later, the euro/dollar uptrend continues, and the exchange rate continues to rise on the hourly chart.
If Cinderella enters the market above 1.2800, and if she holds this list in the next few weeks, her profit will reach 400 points. She might also buy a new pair of crystal shoes!
There should also be a limit to how many time frames you should research on graphics. You don’t want to see that on a screen full of graphics, these graphics are sending you different transaction information.
Our suggestion is to observe at least two graphs under two time frames, and no more than three graphs at most, because the more graphs you observe on different time frames, the greater your confusion. In this way, your analysis will come to a halt. You will also go crazy.