The best chart's the one on which YOUR trade depends
An excerpt from my ebook which is a self-contained trading system known as the S.T.A.R. Forex Trading System which is listed here on Forex Peace Army - Reviews - Forex Education review:
Super Trade System | supertradesystem.com (Tom Hennessy) reviews and ratings by Forex Peace Army
{begin excerpt}
The first thing to realize is that all markets function
within a pattern which was observed - not invented -
known as Elliott Wave. It is important to note that it
was observed because it was already there and continues
at all times. Most traders have heard about it and you
may or may not be familiar with its use. (You will not
need to be in order to use this Technique.) However
without an accurate assessment of the Elliott Wave
pattern it is hopeless to know what the market will do.
Many very good Technicians have a tough time with that
accuracy. So we will use the easiest and most obvious
part of Elliott Wave to setup our tools and employ our
Technique. The big moves are always easy to spot. You
know, they are the ones you wish you were in! These big
moves can come in 3rd or 5th or A or C waves as they are
called. The biggest is always the 3rd but it ALL relates
to TIMEFRAME.
These are all the same currency pair
at the same point in time
What is the TREND?
The addage "The Trend is Your Friend" is a
truism but you can have many trends depending on the
timeframe. And the only trend that is YOUR friend is the
one that is on the timeframe your trade is dependant upon.
This first step is like where you find your location on a map before you can see where it is you have to go next. Our map will be the _ _ _ _ _{left blank for this post} _ _ _ _ _ _ chart - set it to a timeframe the next larger than you normally think you would trade and we need to find a couple of landmarks (see next diagram). They will give us an orientation to be able to find the next tradeable spot. To find this we look for a large move which exhibits 2 traits which give a clue that the big move may be coming to its end:
{end excerpt}
So what IS the Trend? There is always a trend governing your trade but how do you determine which timeframe to use? You could get stopped out a thousand times while following this sage advice: "Trade with the trend". Reason is is that the trend signals will not change PERCIEVABLY at a main pivot. By main pivot I am refering to one that is an actual trend change on this wave's timeframe. In fact I think all of our indicators take a special pride in not giving this away!! Add to that the fact that the timeframes we all use as standard settings on our charting packages are not necessarily the timeframe being used by ANY wave at the moment. Did anyone ask the wave? (now they think I am losing it) That is right - a standard technical analysis setting on a standard timeframe may miss the wave's own clock.
Anyway if you don't have a matching analysis for your current wave's timeframe and have a system for spotting the next trend change your concerns about charting packages will soon be over.
At the very least you will be leaving a lot of meat on the table. Please do not waste any more of your precious time worrying about the chart until you settle on a system.
Cyclon
