In this week forex faq, we have a question from one of our fellow traders.
Below is the question:
What is the best chart’s periodicity to refer to when deciding to enter/exit the market?
Your blog is the BEST ever blog I have ever surfed to learn about the right way to trade forex. Moreover it FOC where others pay hundred or even thousand of dollars to learn about forex. Tqvm Mr Lee.
First of all, I am very happy to know that what I have done here in this blog is useful for you guys out there.
As for your question on the best chart period to use to enter and exit your position. I will suggest you to use the lower time frame to do it.
Take myself for example, I use the 15 minutes chart to look for trading opportunity. However I do not use it to enter a trade. I will move to the 5 minutes chart to enter a trade. This is what I call the top down analysis on one of my book, Master The Skills To Successful Chart Analysis.
The higher time frame is good for identifying overall trends and good trading opportunity. However when we are looking for optimum entry and exit level, we will have to move down to the lower time frame to find it.
If you are using the hourly chart to look for trading opportunity, I will suggest you to go to the 15 minutes chart to look for entry and exit.
If you are using the 4 hourly chart to look for trading opportunity, I will suggest you to go to the hourly chart to look for entry and exit.
I hope that I have answered your question and if you have further question, do feel free to contact me via the comments below.