Forex Technical
The Larger Time Frames Control The Smaller Time Frames
January 19, 2010
Jose Tormos - FXMVP
Let’s review some of the best time frames to use in forex trading to indentify and capture the longer term trends.
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Chart Analysis
You can trade off the direction of the daily charts – they give you the bigger picture. To analyze your charts you go the daily chart and look for important points of support and resistance that coincide on both large and smaller time frames.
When you identify a set up on your charts, use that support and resistance level and look for breakouts and go with them also known in the trading world as a convergence. The larger time frames controlling the smaller time frames is the sensible way of trading and that means getting into and trading the longer term trends.
Chart Analysis
The short term moves of a day or to scalp is the equivalent to flipping a coin and all short term moves are random. Basically if the larger time frame is going bullish yet retracing then you may short the market for a small amount then expect the larger trend to once again dominate and head in the same direction before the pull back. Short term trading is a game between the bulls and the bears and can wipe your account out if you are not in understanding of how the larger time frames control the smaller time frames
Analysis
It is highly recommended that you practice with the MTI 4.0 charting software as you read through these articles. It is easy to download MTI 4.0 and to sign up for the best charting software available today by contacting a charting representative.
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