Everywhere I look there seems to be a consensus that pro traders look at multiple time frames, as well as other things of course, but I'm most bemused by this topic and also multiple market analysis so I just want to discuss those two things.
Firstly I'm aware that in forex the markets are quite highly correlated and I'm wondering what the pros and cons of this are. And perhaps more importantly how we may use multiple market analysis to help us with our trading.
Secondly I'm completely lost in relation to multiple time frame analysis. I don't understand how it works one bit. To me it seems that every time frame has its own unique behaviour. Well not so much behaviour but what I'm trying to get at is lets say you're looking at a perfectly simple trend. Think of the most perfect trend that you can and lets say youre strategy is a simple MA cross... lets also assume that this trend is so perfect that the MA cross happens right at the start of the trend and ends right at the end. Now on a 1 hour chart you would have missed about half the move had you been waiting for example a situation whereby you had the MA's cross on both the 30 min charts as well as the 1 hour charts. And then if you look at 3 time frames at once, you would prob miss out on 3/4 of the move or just get in at the bottom. I don't understand how multiple time frame analysis is of any benefit.
The thing is that I've noticed that the markets always moving at the same rate so to speak but only if you are looking at it from different time frame perspective in other words imagine a slider in your trading platform thing which enables you to select the time chart of your choice... that would mean that a single 100 pip or so candle on the 1 hour chart might in fact be this perfect trend that I was talking about on perhaps the 15 min chart. I'm sure this slider can be done really easily but i'm not interested in making it as I've thought about its applications and I couldnt find any that I thought would work or give me any sort of edge... if someone is willing to make it go for your life. Anyway I just want to understand the logic behind using MTF.
The only reason why I can imagine MTF to work is because the more time frames you take into account and the more they line the greater the chances that a larger number of traders would be using the same/similar strategies as you and hence help move the price the same way as you analysis but even this is questionable in my opinion as the market is driven by the big boys and from what I keep reading, they trade the daily.
Firstly I'm aware that in forex the markets are quite highly correlated and I'm wondering what the pros and cons of this are. And perhaps more importantly how we may use multiple market analysis to help us with our trading.
Secondly I'm completely lost in relation to multiple time frame analysis. I don't understand how it works one bit. To me it seems that every time frame has its own unique behaviour. Well not so much behaviour but what I'm trying to get at is lets say you're looking at a perfectly simple trend. Think of the most perfect trend that you can and lets say youre strategy is a simple MA cross... lets also assume that this trend is so perfect that the MA cross happens right at the start of the trend and ends right at the end. Now on a 1 hour chart you would have missed about half the move had you been waiting for example a situation whereby you had the MA's cross on both the 30 min charts as well as the 1 hour charts. And then if you look at 3 time frames at once, you would prob miss out on 3/4 of the move or just get in at the bottom. I don't understand how multiple time frame analysis is of any benefit.
The thing is that I've noticed that the markets always moving at the same rate so to speak but only if you are looking at it from different time frame perspective in other words imagine a slider in your trading platform thing which enables you to select the time chart of your choice... that would mean that a single 100 pip or so candle on the 1 hour chart might in fact be this perfect trend that I was talking about on perhaps the 15 min chart. I'm sure this slider can be done really easily but i'm not interested in making it as I've thought about its applications and I couldnt find any that I thought would work or give me any sort of edge... if someone is willing to make it go for your life. Anyway I just want to understand the logic behind using MTF.
The only reason why I can imagine MTF to work is because the more time frames you take into account and the more they line the greater the chances that a larger number of traders would be using the same/similar strategies as you and hence help move the price the same way as you analysis but even this is questionable in my opinion as the market is driven by the big boys and from what I keep reading, they trade the daily.
