Forex Trading Times Chart
One of the most common mistakes of new traders is to take a trade while looking at a trend from only one time frame. Every single trader has a time frame he/she prefers to focus in on, whether it be day chart, week charts or even 5 minute charts. The problem arises when you are looking only at your own chart level without looking to a higher chart level for confirmation of a trend.
The reason it’s so important is because the longer a resistance level develops, the more powerful the resistance is. So if there is a tremendous catalyst on the day charts that has been hit numerous times over the past few months without a break in the trend, and you are looking for confirmation solely on the hour charts for the formation of an ascending triangle that will break the pattern, you may be sorely disappointed.
The day chart indicates a weakening upward momentum on which there is not sufficient buying energy to break the catalyst, even though the hour charts are a sure indication that the price will break through. So you buy, and get stopped out immediately. It’s a common and simple mistake, which means it’s easy to analyze and fix after it’s been made, but don’t let it continuously happen to you. Here’s a few tips to help avoid getting caught looking at the trees and missing the whole damn forest on your time charts: Forex Trading Times Chart
1. Always check two time frames higher than your own for confirmation of a trend. The higher time frame should act like an essential secondary indicator before you place a trade to make sure that the pattern holds up both on your time frame and the higher time frames. If you trade hour charts, check the day and week charts before pulling the trigger. Day chartists should check the week and month charts beforehand, and so forth.
2. Do not attempt to analyze more than three chart levels in any trade. This can lead to a great deal of over analysis that is completely unnecessary. Once you start delving into ridiculous complexities on technical analysis, you lose the benefit of self fulfilling crowd psychology because not every single trader is going to look at nine chart levels before trading. On top of that, you just over think the trade and lose the chance to grab what could actually be a very good opportunity. Forex Trading Times Chart