How to View a Market

I can only start to tell you how important it is to traders to understand what is happening in the market on the higher time frames and how to coordinate that information to take advantage of trading on the lower time frames.

For me trading is so much easier knowing I’m entering trades with the wind from the longer-term trades at my back, rather than relying on the concentration and speed it takes to counter-trend trade. When you are patient in your market and trade selection, allowing the market to line up for you, you are going to find trading much easier then you may have when you viewed a market from only one time-frame.

For the screenshot below, all charts are GBPJPY and we have the 3-min on the right with Daily Pivots, the 15-minute minute upper left, and the 60 minute lower right w/ the Weekly Pivots. Likewise a signal is only generated when the trade has higher time frame confirmation.

It’s very important to have confidence in defining market direction so that you see when divergence occurs between the direction on the 15-min and 60-min, or 60-min and 240-min. It’s great when it’s lined up, but you better know it when it’s not also.    

To schedule a complimentary, interactive tutorial on determining market direction go to One on One Tutorial 

Jay Norris is the author of Mastering the Currency Market, McGraw-Hill, 2009, and a Senior Market Strategist with BrewerFX.com 

DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential that changing political/economic conditions may substantially affect the price/liquidity of a currency. Investors may lose all or more than their original investments.