Trading System with Weekly Time Frame
Many traders in the forex market start trading based on intraday charts that measure changes in currency prices in 5 or 15 minute increments or daily charts that show price changes for a single trade. Beginner traders who try to implement this kind of system often don't do well.
The most effective and profitable way that traders can use is to see if there is a long-term trend or range in the selected pair, especially for major pairs that are currently trending and where the trend is going. From here, traders simply follow the direction of the trend, or trade the opposite of support and resistance when there is no trend and price movements are in a range. Using a high time frame on a price chart can allow traders to do just that.
Although traders can actually use daily time frames for the same purpose, traders are still grouped for weekly time frame forex trading because it will be easy to make judgments and decisions about long-term price action at once. It's also a good idea if traders want to use at least one short-term time frame on the price chart, such as a 4 hour time frame, to determine the most ideal entry and exit positions. This will make the calculation results more precise, which means more profit.
Calculating Weekly Time Frame Trend
The reason why weekly time frames are the best for forex trading is because historical forex data shows that if prices can be higher than they were a few months ago, there is a tendency for prices to fall as well. The opposite condition can also occur if the price in the previous months has decreased, it is very likely that there will be a reversal. So, if a trader uses a weekly chart, one easy trick that can be done is to add a trend indicator.
With this indicator, traders must at least count the last 13 to 26 weeks to see what trends exist. From here, you can see how the market behaves in the long term, whether it's an up or down trend. If in 13 or 26 weeks the price is higher, then the market is in an uptrend phase. Meanwhile, if the indicated value is lower, the market is experiencing a downward trend. This method is quite simple so that traders do not need to use various indicators.
Comments
Post a Comment