This is a very common question among new traders as most of you are confused by the number of different time frame you see in your chart.
Below is a question from one of our fellow readers
Hi, What is the best time frame to draw support and resistance lines and trend line?
In this post, I am going to share with you how to deal with the problem so that you will not be so confused when you are trading.
First of all, I must share with you how I do my analysis on different time frames so that you can try it yourself.
I will always start with the higher time frame like the 4 hourly chart. On the 4 hourly chart, I will start to draw the support and resistance line to identify various levels of strong support and resistance.
Do note that the S&R levels on the higher time frame will have more strength compared to the S&R levels on the lower time frame.
Once I am done with the 4 hourly chart, I will move down to the hourly chart to do the same support and resistance levels identification.
For me, I trade on the 15 minutes chart and therefore I treat the 15 minutes chart as an entry time frame. I will start by drawing all the major S&R levels I identify on the higher time frame on the 15 minutes chart so that I can have a visual of them when entering my trades.
Once I do that, I will then start to draw the S&R on the 15 minutes chart. With all these important levels of S&R identified, I will then start to look for trading opportunity based on the forex strategies I am using.
As for the trend line, I will only draw it on the 15 minutes chart where I look for the trading opportunity.
I hope that I have answered all your question regarding S&R and trend line. No matter how good you are at identifying all these S&R levels, it all still boils down to the strategies you are using. Therefore you must have a set of useful and profitable strategies on hand in order to make consistent profits from trading.
I will like to take this opportunity to advice all of you guys here to always start by trading on a demo first and you should only move to live trading after you manage to have 2 consecutive months of profits in your demo.