Forex Trading Strategies: How Does Time Frames Inter-link?

Hunny Gee · June 29, 2012

Forex Trading Strategies : Perfect trade

Forex trading pair: Usd Jpy

This post will show you guys how does the different time frames link to each other. And how and why do we take the trade.

Lets start off with the usd jpy 30 min chart.

I know i should not be posting this as i strongly do not recommend new traders out there to look at the lower time frame. However this post is to show you how and why did i entered on this trade.

In the chart above, which is a 30 min chart. I spotted a really nice long nose pin bar that protrudes out from the following prices.

Do note that, i rarely trade the 30 min chart. However, i took this trade is because it links with the higher time frame.

If you look at the chart here,

This is the daily time frame which i zoomed out. We can see that the usd jpy is at its swing low. And it is at the lowest point among the years. More over we see divergence in the macd as shown in the red line in the chart.

This is when i love the best.

A Super All Time Swing Low! – I am prepared to take an up trend buy order. Therefore, this is why i zoom to the 30 min chart (shown above) and found this perfect pin bar right at the ALL TIME SWING LOW. I knew this was it!

Therefore as shown in the chart, i place a buy stop order at the orange line which i marked as “buy stop”.

And sure enough, the buy order was triggered.

Lets look at how the 30 min chart link to the 1hr chart.

Right when the 30 min pin bar was formed, the 1 hour chart as seen above formed a pin bar too.

Now you know this is a good trade. A pin bar at the 30min and the 1hr time frame.

And the pin was triggered by the 3rd bar with a nice long bullish bar. Nice!

And all these while our stop loss is placed right below the pin bar.

Lets look at the 4hr time frame.

In the 4hr time frame, there was no price action confirmation. It happens, sometimes when we look back our charts, and we see price reversing. But we do not see price action confirmation. There was no price action confirmation in the 4hr time frame, but that does not mean there is no price action confirmation in the other time frame!

And we do see a slight divergence too in the usd jpy 4hr time frame in the chart above.

Lets now look at the daily time frame -

After the 30 min and the 1 hr pin bar formed, the day ended and in the daily time frame:

It now formed a daily pin bar at the swing low!

What more can you ask for?!

I hope you guys can now see how does forex trading actually works by looking at the whole picture and not just a specific time frame. This gives us confidence which comes from knowledge and understanding of how the market works.

Forex trading will now become a business if you treat it this way.

An if you guys have not join our group, i hope to see you there.

I will be there to guide you along as a personal mentor.

To an Awesome Trading as Always,

Ezekiel Chew

Asia's #1 Forex Mentor