Three things that you should learn about multiple time frame analysis

Majority of the people are not really happy in this world. They are continuously struggling to earn their living and make their life better. You might have the highest education in a certain field but still, you will have look for a decent job to support your family. But even after looking all the possible sector there is a high chance that you won’t find your dream job. For this reason, people all over the world always look for alternative source of income. This is when the term Forex trading comes into action. If you go to the Wall Street or meet professional traders in Switzerland then you will be surprised to see that they are very easily leading their dream life by trading the Forex market. But do you think that becoming a successful trader is an easy task? The simple answer is NO. You need to learn a lot to understand the nature of this market. In today’s article, we will discuss the multiple time frame analysis which is a little bit advanced topic in the field of Forex.

What is multiple time frame analysis?

Multiple time frame analysis is nothing but doing the technical analysis in many different time frames. The Forex market is dynamic in nature and it often exhibits lots of false spikes and trading signals. The professional traders use the multiple time frame analysis to filter the best possible trade setups. But being new to this industry, you might find it hard to do the multiple time frame analysis but if you trade with patience then it’s just a matter of time understand this technique. However, there are three essentials things that you should consider while doing the multiple time frame analysis. Let’s discuss it in details.

Emphasize on the higher time frame data

Though it’s called multiple time frame analysis yet you should give a great deal of emphasis on the higher time frame data in CFD trading. Most of the novice traders give equal importance to every time frame. But the expert traders at Saxo always prefers to trade in favor of the higher time frame prevailing trend. They use the lower time frame support and resistance level to execute high-quality trades with an extreme level of precision.

Use the price action signal

Multiple time frame analysis tends to work best when used the price action confirmation signal. Price action signal always you to trade the market with predefined stop loss and take profit level. Since you are new to this market understanding all the basic pattern of the Japanese candlestick will be hard for you. But if you are determined and demo trade the market then you will realize how easy it is. In fact, you can even trade the high impact news release with the help of price action confirmation signal. But before you place your trade make sure that you have done the multiple time frame analysis to eradicate the false trading signals.

Never use any indicators

When you use the multiple time frame analysis technique it’s highly imperative that you avoid indicators. Indicators are helping tools which will allow you to execute high-quality trades in favor of the market trend. But when you start using the indicators you are just messing up your trading chart, multiple time frame analysis is a technique to filter the false trading signals. So there is no need for you to use any indicators or EAs. You need to focus on manual trading system and trade the raw price data using the price action signal.

All of you should know that the Forex market is dynamic in nature. So when you place your trade make sure that you have used proper money management. Facing a few losing trades will not jeopardize your trading career. But if you start trading with a big lot without doing the multiple time frame analysis then it’s just a matter of time to lose all your investment.