Why You Should Look at Multiple Time Frames When Trading Forex

Before now We have discussed what time interval or frame is and how to choose the best time intervals or frame to fits your trading style. Multiple time interval frame research follows a top down approach when trading and allows traders to estimate the longer-term trend while pointing out the real entries on a smaller time interval/ frame diagram. But Before we explain how to do multiple time interval study for your forex trading, we feel that it‘s compulsory to work out why you need to actually flip through the different time frames. Above all isn’t it hard enough to analyze just one chart being a forex trader to concentrate on？

Confidently being a trader You have got a billion indicators on, you have gotta read up on economic news, Also is not only trading you do, you also got to have basketball practice, a Call of Duty session, a Fornite session, a Dota 2 session, a hot date at McDonalds, then an hour of viewing Instagram stories, and another two hours watching TikToks, Facebook and other things. So much engaged.

Well, let‘s play a game called “Long or Short” to highlight why you should be paying attention and putting in further effort to look at multiple time frames. And The rules of the game are easy. You look at a chart and you make up your mind anyway to go long or short. Easy, right？ Okay, ready？ Let’s go...

Lets take a look at the 10-minute chart of GBP/USD at 8:00 am GMT.

We have acquired the 200-period simple moving average (SMA) on the chart, which seems to be tightening as resistance. With price testing the resistance and forming a doji, it seems like a good time to short right？ Lets say yes as the answer.

See what happens next!. The pair closed above resistance and jump up another 200 pips!

Anyway, that's too bad!

What the hell happened？ Let‘s jump on to the 1-hour chart to see what happened. If you had been looking at the one-hour chart, you would have noticed the pair was really at the bottom of the ascending channel. What’s more, a doji had formed right smack on the support line! A clear buy signal!.

The ascending channel would have been even clearer on the 4-hour chart.

If you had looked at this chart first, would you still have been so quick to go short when you were trading on the 10-minute chart？ All of the charts were showing the same price data. They were just different time frames of that same data. Now do you see the import of looking at multiple time frames？

We are familiar to just trade off the 15-minute charts and that was it. For that reason when everything looked good the market would suddenly stall or reverse we could never understand why. It forever crossed our minds to take a look at a larger time interval or frame to see what was happening. When the market becomes stable or reverse on the 15-minute chart, it was most of the time because it had hit support or resistance on a larger time frame.

It draw a set of hundred negative pips to learn that the larger the time intervals or frame, more certainly an important support or resistance levels would hold.

Trading using multiple time frames has probably kept us out of more losing trades than at all other one thing alone. It gives you the ability to identify where you are relative to the BIG PICTURE by allowing you to stay in a trade longer. Although most beginners look at just single time frame.

Most beginners in forex take hold of a single time frame, apply their indicators, and ignore other time frames. But the trouble here is that a new trend coming from another time interval or frame spoil forex traders who dont care to examine the big picture more often.