subject: Forex Trading - Using a Multiple Time Frame Strategy [print this page] Forex Trading - Using a Multiple Time Frame Strategy
One of the most dependable features of the currency market is its tendency to form trends in an assortment of time frames.
Trends with the forex market can linger for weeks, month or even years and traders who support themselves with these trends can improve their chances for success. But why does multiple time frame strategy work?
Natalia Osorio Editor of the "Best Forex Trading" website -- http://www.BestForexTradingUsa.com -- pointed out;
"The multiple time frame strategy allows the traders to trade only in the direction of the overall trend. Additionally, it requires the trades to be placed only after the price has pulled back to a favorable entry point. In short, the strategy does not allow the traders to enter long at the highs or short at the lows.
The technique can also be utilized for shorter time frames. Like for example, when the active day trader can use the four-hour chart for long-term reference and a 15-minute chart for short-term reference"
By performing a role of a trend trader, your main objective is to use the trend to your own advantage. If the currency pair is in a downtrend, you should look only for short entries and ignore any opportunity to go long. More so in the same instance, if the pair is rallying, you must find your entry point and locate a greater resistance level.
The Tops and Bottoms
If the trader waits for the oscillator to turn before entry, he will not be able to enter at the absolute peak. There are several traders who seem to be excessively concerned with achieving the ultimate entry point; they desire to sell short at the peak and proceed long at the absolute bottom.
"The problem in choosing tops and bottoms is that it is a dangerous game. No one can really foretell the peaks and valleys in stocks, options, futures, as well as forex. Any trader who tries to achieve this is simply attempting to get lucky.
If the trader waits for the momentum to turn, he or she has no chance of entering at the very top or bottom which is fine. Always remember that an experienced trader is willing to sacrifice a portion of the move, in exchange for the enhanced probability of success that patience grants"N. Osorio added.
Further Information About The Best Forex Trading Softwares And Resources By Visiting; http://www.BestForexTradingUsa.com
