In today forex faq, we have a question from one of our fellow traders asking me how to use different time frame for intraday trading.
Below is the question:
How to use multi-time frame for intraday trading?
This is a great question to ask as there are a lot of different time frames that you can trade on. Therefore if you are able to use multiple time frame to trade everyday, it will be able to help you improve your trading accuracy as a whole.
So How Should You Use Them?
First I will suggest that you start from the higher time frame like the daily or 4 hourly chart. What you should be looking for is the overall trend as well as the major support and resistance levels on that time frame.
Do note that the support and resistance on those higher time frame has more strength than the support and resistance that are found on the lower time frame.
These levels on the higher time frame can be a great place to place your stop loss and target profits.
After determining the trend and important S&R levels on the higher time frame, you should now move down to the lower time frame like the hourly chart.
You just have repeat what you have done on the previous higher time frame on this time frame and you are done.
So now that you have the trend for both the time frame, you will be able to determine the overall trend for the day. If you are new to trading, I will suggest that you follow the trend and trade. It is very hard for a new trader to trade against the trend.
So if you ask me how to use the multi-time frame to trade, I will suggest that you use the higher time frame as a way to identify major S&R as well as the overall trend of the market.
Then you move down to the lower time frame like the 15 minutes to look for good entry point according to your strategy.
For those trades that are in alignment with the overall trend, you will have a higher chance of winning as you are trading in the direction of the trend.
I hope that I have answered your question.
Since we are talking about time frame, let me answer another question from one of our fellow traders.
Below is the question:
What is the best time frame to enter and exit your trade?
For me, I am a fan of the 15 minutes chart and therefore for me, the best time frame to enter a trade is the 15 minutes.
For exiting your trade, there is nothing to do with time frame. It has to do with your strategies as it will have a set of exit conditions to consider.