Here at the dnbcmarkets.com School of DNBC Global Markets Academy, we like using three time frames.
We feel that this gives us the most flexibility, as we can decipher the long, medium and short-term trends.
The largest time frame we consider our main trend – this shows us the big picture of the pair we wanna trade.
For example, on the daily chart, EUR/USD is trading above the 200 SMA which tells you that the main trend is UP.
The next time frame down is what we normally look at, and it signals to us the medium-term buy or selling bias.
Below is a 4-hour chart and it’s clear that EUR/USD continues to have a bullish bias.
The smallest time frame shows the short term trend and helps us find really good entry and exit points.
You can use any time frame you like as long as there is enough time difference between them to see a difference in their movement.
You might use:
When you’re trying to decide how much time in between charts, just make sure there is enough difference for the smaller time frame to move back and forth without every move reflecting in the larger time frame.
If the time frames are too close, you won’t be able to tell the difference, which would be pretty useless.