1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Chapter 23, Part I. Multiple Time Frame Intro. Page 2

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 23, 2013.

Thread Status:
Not open for further replies.
  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    9,925
    Likes Received:
    10,614
    How to choose your own primary time frame

    In fact there are no some quantitative rules that we could apply to answer this question. I just want to note here that if you’ve chosen the wrong primary time frame to trade, then your trading will be not so efficient as it could be. For example, what particularly time frame you intend to start with when you will finish our school?

    Pipruit: Probably I will start out using a 5-minute chart…​


    Commander in Pips: Why?

    Pipruit: Well, because price moves fast, this creates a lot of possibilities and signals and will give me the opportunity become rich fast.​


    Commander in Pips: …or loose all of your money faster.

    Pipruit: I didn’t think about it from that point of view.​


    Commander in Pips: Really? Well, know you have time to do this. All right, now let us set the jokes aside. A major rule tells us that as a time frame gets shorter, it is harder to trade it.

    Pipruit: And why?​


    Commander in Pips: Because you have to think faster. If you shift from the weekly chart to the daily – you will have to think 5 times faster. Shifting from daily to 4 hour – 6 times faster, from 4-hour to hourly- 4 times, from hourly to 5-min chart – 12 times faster and so on. Depending on your skills there will be time frames where you will not be able to adequately assess the situation. That’s why newbie traders very often loose a lot of money.

    The second reason is as your time frame drops, you will come closer and closer to market makers. So, trading on the 5-min chart and 1-min chart you will collide by head on with each other. Now imagine what the level of your trading skills should be so that your positions will be stronger than the market-maker’s one. Any newbie will be crushed in this churn. The trading technique is different when you trade on intraday charts and daily and higher charts. With intraday trading you have to be much more skilful with market mechanics, while on daily and higher time frames, market mechanics is not so important.

    Pipruit: But on a 5-min chart I will react faster to price changes than on an hourly chart. The 5-min chart outstrips hourly one.​


    Commander in Pips: Heh, and a 3-min chart outstrips 5-min, right?

    Pipruit: Of course.​
     
Thread Status:
Not open for further replies.

Share This Page