After 30 years of trading, and over 8 years of personal coaching in the forex trading business, one of the most common trading issues that aspiring traders continue to have is that they get lost in small time frames and miss the key levels (and higher probability trading opportunities) that the higher time frames provide.
My experience leads me to believe that the biggest reason for this is the need for action. Smaller time frames mean more trades. And folks, trust me, that's not a good thing. More trades bring with it a host of problems - far too many to delve into in this article. Smaller time frames DO have their place, but in my humble opinion, not for initial analysis.
Trading requires the patience to wait for high odds possibilities (setups) to present themselves. Waiting patiently is what professional traders do. If successful traders do that, and you're not successful, why reinvent the wheel? Success leaves clue, and this is an easy one!
So how do higher time frames help the over-trading problem? Well, by identifying key levels on higher time frames, ie 4 hour and daily charts for the purposes of day trading, and committing to waiting until those levels are reached before committing to a trade, it forces you to sit on your hands until a key level is touched.
Note that it doesn't necessarily mean that you want to trade at that level, but it alerts you to the possibility of a trade setup, and your game plan should provide you with an effective methodology for entering trades based on high probability patterns that can be traded at these key levels. Does that make sense?
I love seeing the transformation in traders once they understand what I've just said. I recently had one member, who has always been very good at reading support and resistance levels, tell me that he is now spending most of his time on daily charts, and it has made a significant difference for him. So now, his one hour chart trades are dictated by what the daily chart is telling him in terms of price levels and candlestick action.
Most people tend to greatly over-complicate the trading process, so I hope that this article helps you to understand that your time would be far better spent on the higher time frames. For day trading purposes, you should find the 4 hour and daily charts to be very useful!
Thanks for dropping in, and I hope you've found this information helpful. Please let me know if you have any questions or comments.
All the best,
Vic Noble
**To learn more about forex trading and how I teach, I have a FREE e-Book, plus 7 great videos on key trading concepts that I believe will genuinely help you. No obligation, just good useful information!
I'm Vic Noble, and after more than 30 years of trading, 5 1/2 years as as a futures broker, and a personal forex coach since 2006, I've had the unique opportunity of seeing what separates winning traders from losing traders. I just love helping so many people achieve success, and I know I can make a positive difference for anyone. So here's some great, 100% FREE educational material that I know you'll find helpful! Get it here: http://www.forextradingandeducation.com/wp/free-fx-training/
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