You need to learn the skill of trading multiple terms. It’s like zooming in and out to see what’s clearly going on with the market. If you find a trend on a smaller timeframe, confirm that on a higher one. Many traders make the mistake of trading on only one term. It only makes them waste their time and energy and lose deals.
Let’s say you find a trend on the intraday chart and a trend on the daytime chart in the same direction, it’s like having the wind in your back. If you can master the art of identifying currency pairs that have daily trends in the same direction as daily and weekly ones, you can reap huge benefits.
If you are trading on an hourly chart, look for confirmation on the 4-hour chart. If you are trading on a 15-minute chart, look for confirmation on the 60-minute chart. And if you find a good signal on the daily chart, look for confirmation on the weekly chart.
So, usually first pay attention to setting up trading for the intermediate term. If you find a potential reversal of the trend, ask for confirmation before a longer date. Longer-term terms should also show signs of a possible reversal of the trend, such as a stochastic cross or dodge. Now go for a shorter time for the signal in the same direction.
Now that you are viewing charts, always use the right amount of time to make the right trading decisions. The preferred time for each schedule should be:
Monthly schedules: 7 years,
Weekly schedules: 2.5 years,
Schedules of the day: 8 months,
Schedules for 4 hours: 1.5 months,
Schedules for 1 hour: 10 days,
Schedules 15 minutes: 28 hours,
5-minute charts: 8 hours.
Timeframe coordination means viewing trading settings on a higher timeframe and then waiting for the trading signal in the same direction on the lower timeframe. Therefore, once the signal arrives at a smaller timeframe, you should recheck the higher timeframe to confirm that the initial signs justifying the trading signal are still in place.
The disadvantage of this longer term of trend confirmation is the counter trend market, the side market or the reversal of the trend. If you use higher timeframes to confirm a reversal, you will skip it as it happens first on the lower timeframes. This is why it is very important for you to understand the difference between trending trades and counter trending trades.