Determine Main Trend
The largest time frame we consider our major trend – this provides us the big picture of the pair we wanna trade.
On the daily chart, for example, EUR/USD is trading above the 200 SMA, indicating that the primary trend is UP.
Determine Current Market Bias
We typically look at the next time period down, which indicates a medium-term buy or sell bias.
The 4-hour chart below shows that the EUR/USD remains bullish.
Determine Exit and Entry
The shortest time period reveals the short-term trend and assists us in identifying excellent entry and exit points.
Multiple Time Frame Combination
You can use any time frame you like as long as there is enough time difference between them to see a difference in their movement.
You might use:
- 1-minute, 5-minute, and 30-minute
- 5-minute, 30-minute, and 4-hour
- 15-minute, 1-hour, and 4-hour
- 1-hour, 4-hour, and daily
- 4-hour, daily, and weekly and so on.
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