Now that you understand how to read a chart layout, it may confuse you when looking at it on a large time frame and you see one thing, and it goes the other way on the smaller time frame. Looking at multiple time frames is crucial to placing trades and looking at where you are investing your money short-term or long-term.
Buy Low, Sell High… Sounds familiar? You want to find the highest point of the market and the lowest point of the market to place your trades and profit. The blue dots represent the highs and lows of the market on a weekly time frame. As you can see, there are also highs and lows in between the dots on smaller time frames.
If you are a long term trader, you typically want to look at the larger time frame such as monthly, weekly, or daily. This is good for small and big investments with very small risks, although it may take some time before you see any returns.
If you are day trader, you typically want to look at the 4 hours to 1 hour and even 15 minute time frame. This is good for when you want to trade everyday and holding your trades for a few hours to a few days. Majority of traders fall in this category because they want to make money everyday. This is also popular with traders that have plenty of time to study and trade or trade as a profession.
If you are a scalp trader, you typically want to look at the 15 minutes to 5 minutes, analyzing the market’s volatile fluctuation and catching small setups. Scalpers tend to use high risk investment to catch quick profits and get out in a matter of a few seconds to a few minutes. This is popular with traders that want to make a certain amount of money with little time spent.
“I trade long-term 50% of the time so trading does not consume majority of my time of the day, I trade daily 40% of the time to secure daily profits as I hold some trades open, and scalp 10% of the time if I see a good setup setting up to make a quick profit, so it’s important for me to look at the market on different time frames so I can confirm my long term setups and enter at the dips and peaks to scalp. I usually look at the weekly time frame first to get an overview of where the market currently is and work my way to the smaller time frames such as 15-minute and 5-minute to place trades. Everyone has things to do throughout the day, but I place trading as one of my main priority. That’s how I am able to trade swing, intraday and scalp. However, if you are someone that is busy most of the time, any trading style works as long as you apply the same process every single time.
A few hours spent a day mastering forex can set you financially free within 3-5 years. Trust the process”
– Gian Gonzaga