This article looks at the FX converter and trading with multiple timeframes.
When you trade on the forex market you should consider the use of multiple timeframes. You should also consider where the FX converter fits into the equation. There are a lot of traders who feel that you should not be using an FX converter when you trade. However, if you feel that your trading has a place for this tool then you should consider using it.
The Use of an FX Converter with Multiple Timeframes
When you work with multiple timeframe you may not have a place of the FX converter. This is due to the multiple timeframe strategy primarily working with the charts. The charts that you can get with a converter are generally not the ones that you should be using to trade with. The FX converter will usually have line charts that detail the overall movement of the market. This is not always something that you need when you are looking at the multiple timeframe strategy.
Using More than One Timeframe
When you first start trading you are told to find a timeframe that you are comfortable trading in. This is the timeframe that you are told to focus on and find a strategy for. This is why many traders are confused about the use of multiple timeframes to trade.
When you use multiple timeframes you are not going to be trading in all of them. You are going to be using the different timeframes to complete trading analysis. The analysis that you complete over a number of different timeframes will ensure that you are getting the big picture of the market.
The Risks of Using One Timeframe
When you use only one timeframe you are going to have a couple of risks that you have to face. The first risk is that you are not seeing the full movement of the market. The long-term movement of the market will affect the trading that you complete in the short-term. This is something that many traders do not consider when they are trading.
The second risk is that you are not getting the best entry and exit points. When you use long-term analysis you are looking at vague ranges of prices for entry. However, when you look at short-term analysis you can be more precise with the points that you are getting.
Which Timeframes You Should Look At
The multiple timeframes that you use will vary depending on the type of trading that you are looking at using. All strategies will have a timeframe that they work in and you need to know which additional timeframes you should consider and what you have to do in these timeframes.
If you are looking at short-term trading then you are going to be working with hourly charts and shorter. The charts that you should trade off are the 15 minute charts and you need to use the 5 minute charts to find your entry points. With medium-term trading you will be trading on the daily charts, but you should be using the hourly charts to find your entry points. When you trade long-term you need to use the weekly charts to trade on, but the daily charts to find your entry points.