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Chapter 23, Part II. Buy or Sell?

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Jan 19, 2012.

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  1. Administrator

    Administrator Just Administrator :-)

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    Part II. Buy or Sell? [​IMG]

    Commander in Pips: So, we’ve just studied why we even need multiple time frame analysis at all. Still before passing right to the application of it, I just want to show you why you really need it by some examples.

    [​IMG]


    Pipruit: Oh, this should be interesting.​


    Commander in Pips: I hope so. Although to analyze just a single chart is not simple work at all, we will try to go a bit further. Tell me, what you see on followed chart:


    Chart #1 | EUR/USD 60-min and 7X5 DMA
    [​IMG]

    Let’s suppose that you’re hourly chart trader. Here is what you see as on chart #1. What kind of trade do you prefer in such environment?

    Pipruit: Well, I see an excellent thrust down, 7X5 holds trend very well. Now the market touches MA again, so, it’s time to sell, I suppose.​


    [​IMG]

    Commander in Pips:
    It’s difficult to make some other conclusion just looking at this picture. Now let’s see what has happened after…


    Chart #2 | EUR/USD 60-min and 7X5 DMA
    [​IMG]


    Pipruit: Hm. Curious. Looks like I’ve entered right at the moment of trend shifting. Well, this could happen sometimes. And what is that yellow zone that you’ve marked on the chart?​


    [​IMG]



    Commander in Pips: Well, yes, this could happen. But if you apply multiple time frames, you never enter short here. Here is why:


    Chart #3 | EUR/USD Weekly
    [​IMG]



    Market has reached Weekly Agreement support at weekly oversold – to enter short right here was suicide. After the has touched this level it has jumped up for about 400+ pips, because this was not just a deal of the daily chart but mostly weekly.
     
    #1 Administrator, Jan 19, 2012
    Lasted edited by : Oct 1, 2016
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