When time frames contradict each other?

Hi,

I have a question regarding time frames that has caused me lots of stress because i can not figure it out.

what do you do if the 4h is showing quite a clear uptrend but the 15m is showing a clear downtrend.

How do you determine if the 4h uptrend is still viable or if the downtrend on the 15m is better and a sign of market direction changing.

Support and Resistance levels just do not seem to work. What i mean here is there is no way to tell if a level will hold or not, it could bounce off the level or it could bounce , form a pin bar/engulfing or and then go back to break that level anyway…??

Forex just seems like there is no clear way really to know what is going to happen, when you backtest a system it always works then in real life when you put it to action it just fails completely.

Indicators and price action are all the same and appears to give an illusion of showing anything different. they all tell you the same information and if one says to buy, its pretty much certain that another indicator will tell you to buy…

you look in the past and buying would of worked…then you buy and it loses.

i guess my question is two part.

  1. Is Forex really a viable option to pursue when it does not seem without inside information that you can really make a confident prediction of market direction, you can only speculate and hope you are correct

  2. How do you determine if a market will go up or down when different time frames are giving you opposite information?

You are looking and asking for certainties. And there are no certainties. There is no way to ‘predict’ market direction. The best thing you can do is calculate probbabilities to create an edge. You should google the word statistics and get more knowledge on that subject.

Back to your questions:

  1. Yes FX is a viable oprion
  2. Create a trading plan and a rock solid PERSONAL strategy

And for the question on contradicting timeframes:
Higher timeframes are always more reliable than lower timeframes, because the represent more data.

Cheers! :23:

What I personally do is use 3 time frames;
Use H4 to identify a trend over long term
Use H1 to confirm the trend is still running and not about to turn
Use M5 to pick an optimum trade entry point.

This is described in detail in the 3 Ducks trading system and there is a free downloadable video showing how it works

As a general rule I listen to the signal from the larger time frame. The 4-hour time-frame signal is, I think, always more viable and more long-term than the 15-min one, let alone a 5-min signal. That said, 15-min time-frame can give you a good short-term signal that you can use, while always keeping in mind that the 4-hour signal says something else.

Timeframe is count history price on certain timeframe, if we use one hours timeframe, hence we will read one candlestick will represent price from open high low and cllosed during one hour, so I think is normal if we look different pattern on different timefarme.

I look at it as the shorter the time frame the shorter i plan to stay in the trade.

If i see a trend on a 15min chart i will likely be looking to get out of it fairly quickly for a small-medium pip gain.

I would presume people looking at 4hr + charts would be more trend traders looking for large PIP gains over a longer period of time.

Things should go this way:

  1. You are educating your self.
  2. While you are educating your self you are implementing everything you are learning on a small live account.
  3. You are developing trading strategy based on your education and idea of what kind of trader you want to be.
  4. You are testing your strategy for at least 9-12 months.
  5. You are writing down in a trading journal everything you do in this testing period.
  6. The result of this test will show you if your strategy is good or not.
  7. If not, than you should think about what is wrong and if you can make some adjustments, or to start something totally new.

You wait for all timeframes to go in that direction and pull the trigger. If you scan 20 pairs it shouldn´t be difficult to spot good set ups. There will be weeks when there are no good trends and the only thing you have to do is sit down and do nothing. But if you are patience enough you will take the best set ups.

Choose any indicator you want, RSI, stochstics, CCI, you name it and wait for it to align in all timeframes and pull the trigger. The entry is not the most important thing, trust me, there are different entry methods. The most important aspect is to find a good set up and manage the trade once you are in.

When this situation happens, then try to check the higher time frame, mostly the higher time frames are more reliable. But sometimes things go wrong and high time frames also fail.

Technically, they can’t contradict themselves. They are just bars that show the price’s action during a selected period of time. So, who do contradict themselves?

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