Timeframe trading strategy
What it is? Timeframe trading strategy
A multi-timeframe trading strategy is the best thing to do for profitable forex trading. The most valuable thing about this strategy is that it uses three indicators on different timeframes.
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The reason for trading profitably is that all forex orders depend on the duration of each trade. This strategy is not new as it is widely used in the spot forex market. But timeframe trading is a new industry in the market, which is why she explained the new wave of this strategy.
You are wrong if you think this strategy is not suitable for the forex market. You are correct that timeframe trading is a short-lived instrument. However, this statement misleads you because it is the ideal method for determining the ideal entry point to provide traders with the opportunity to double their investments.
The strategy involves tracking the price movement of the underlying asset on several timeframes. To get a clear understanding of the market, it is enough to use three different timeframes. If you use fewer time frames, it will give you an inaccurate and incomplete analysis.
At the same time, using more timeframes can be confusing due to the abundance of data analysis. You should pay attention to the “rule of four” before you start using a strategy.
The rule of four and trading 15 minute timeframes
The Rule of Four uses medium time frames to calculate short and long term frames. Let's take an example: we decided that our average time interval is 4 hours (240 minutes). Thus, your short-term period should be 4 times shorter, and your long-term period should be 4 times longer than the average timeframe. What we got:
- Short term: 1 hour (60 minutes)
Medium: 4 hours (240 minutes)
Long term: 16 hours (960 minutes)
This rule helps the trader to make the current decision over a wide range of timeframes.
What does a timeframe trading strategy give you?
Applying this strategy is an ideal way to start your analysis with a long-term time frame and then move on to a medium-term time frame and finally to a short-term time frame. What will you see? Long-term timeframe analysis gives you a wide variety of facts about which direction your trade should move.
Average timeframe analysis allows you to see price jumps that occur within the underlying trend. It is the mid-term time frame that helps the trader gain insight into short-term and long-term trends.
In conclusion, you should know that trading on time frames allows the trader to see smaller price movements. This is why it will help you understand market trends and find the perfect entry point.