In today forex faq, we have a question from one of our fellow traders.
Below is the question
Hi…I am new to the Forex…and I wanted to learn to trade Forex to replace my income…as I am still underaged to receive pension…another 2 years to go…Now my question is…I have followed your email and have read a lot at your Blog and I find it quite confusing to interpretate the different time frame of the chart…For example…I normally look at the 1H chart to search for good entry opportunity….But as soon as I executed the trade and go the shorter time frame… I notice the swing was just the opposite… what is your advise for me??? Please advise….Thank you…
First of all, I am very happy to know that you are already learning forex to prepare for your retirement. Giving yourself more time to learn this trade is a wise decision. The problem that most new traders face is their eagerness to make money and this usually leads them to more losses instead.
As for your question, I understand that you are using the hourly chart to look for trading opportunity. However I believe that your problem is you are also using the hourly chart for entry and that is why you find that the swing was just the opposite on the lower time frame.
My advice for you is you use the hourly chart to look for trading opportunity. Once you have a sign of a good trade coming, you should then move down to the lower time frame to wait for the best entry point. It could be through the use of some indicators or trend line break. This totally depends on your trading strategy.
Most of the time, the lower time frame will be able to provide you with a better entry than on the higher time frame. For me, I often use the 15 minutes to look for trading opportunity. once I see a trading opportunity coming, I will then move down to the 5 minutes chart to get the best entry.
I hope that this information is useful for you. For those of you who have something to share regarding this issue, do feel free to give your comment below.