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Posted on Dec 31, 2019 at 08:59 PM
Every time traders call in during our Question & Answer sessions, we hear this question very often: “is it possible to correctly predict the trend direction?”
My answer is quite direct: No, it’s impossible to predict the market,however, there are methods used to achieve near accurate results.
Now, I know you may be asking why.
Let’s consider this together;My 5 & 15-minute charts which I use to scalp show a clear downtrend, however, when I go to the 1 & 4-Hour charts which I use for active Day-trading, I get to see an uptrend.
Wawu…! So what then should I do?
You see, the trend doesn’t quite exist. It is a mirage, because you can manipulate it using the different Time-Frames, and that’s my No.1 secret for FREE: “A TREND HAS NO MEANING WITHOUT A CORRESPONDING TIME-FRAME”
In this series, we would be considering some of the techniques that can help your trading when you master them, so ensure to stick with me till the end of this piece.
Let’s dive right in, shall we…?
Now imagine that my Day-Trading Time Frame on the H1 showing a steep Down-Trend (As seen below)
But when I want to scalp on the same day, I go down to the M5 Time-Frame only to find a steady rising Up-Trend. (see image below)
This shows that as Forex traders, you need to always consider your time-frames before you try to identify the trend direction for the day.
This leads to the next question:
“What time-frame should you choose to trade with?”
I may not be able to choose for you, but I can tell you that the first thing to decide is your trading style and this will guide your choice of time-frames.
So as a rule of thumb, take note of the following:
Scalping – is best done on the 5 & 15 minutes time-frames.
Day Trading – is best achieved on the 15 & 30 minutes time-frames
Swing Trading – is most successful on the H1 & H4 hours time-frames
In summary, the trick is to first identify your trading style & then zoomin 100% for the profit on the appropriate time-frame.
Try to master this first and I will be revealing more Trade Secrets on “Telling the Trend” in the next article.
I hope you found this post informative and got the free secret. If you did, let me know your most preferred trading style in the comment section & I’ll comment on how you can go about the best trading time-frame.
Also, If you didn’t get the secret and you need further clarifications, ensure to leave a message in the comment section and I will be glad to shed more light on what we have learned earlier.
The second part of this series has been published! Click here to continue reading now.