How to trade multiple timeframes
The U.S. Dollar Cash Index shows how swiftly the plunge through the 86.00 level was taken out. This leaves the 85.50 area as resistance and the minor psychological level of 85.20 as support. The “00” and “50” price levels are magnets and prices are attracted to the next “00” or “50” level.
The downtrend on the longer term view will stay in place until prices can rally up through the lower line of the Wave, currently at 85.80. Short term the consolidation is trading within in a 20 tick range.
It’s important to separate the timeframes as each will have individual support and resistance level and these will be important to near term price movement on each chart. Let’s take the Swiss Franc for example.
The daily chart shows a downward angling Wave (resistance) and even though there is support at the “00” 1.2400 level, the 1.2496 (just four pips shy of the 1.2500 level) is resistance. Even though prices rallied off 1.2400, there momentum break will not shift into high gear until prices can rally through the resistance of the Wave and 1.2500. That certainly doesn’t mean that this 100 pip range is not trade-able…just not off this chart.
Enter the 60 minute chart set up:
The shorter term swissy has a downtrend line that if broken (and confirmed by the MACD Histogram) could trigger a buy.
*All charts are done on eSignal Premium with the EZ2 Trade Software Collection. www.ez2tradesoftware.com
Raghee
Horner is an trader with more than 15 years’ experience in the markets.
Ms. Horner has taught her brand of technical analysis and charting
strategies to students all over the world. She is also the author of
the bestselling “Forex Trading for Maximum Profit” and “Thirty Days of
Forex Trading”. Emphasizing charting and price action and continues to
teach the tools and strategies that encourage self-directed traders to
pursue the study of chart analysis and market psychology. She is a much
sought after public speaker who has conducted seminars in the US,
Canada, the Caribbean, and Asia. For more information on Raghee’s
analysis and trading email cs@raghee.com or visit www.raghee.com.