Greetings, I’m pretty new and I’m doing the Babypip school at the moment.
I’ve come to chart patterns and now I’m wondering what timeframe those chart patters could be found in?
And the higher timeframe the stronger is the chart pattern right?
Would it be good to combine chart pattern with two SMA’s as a confirmation to enter the trade to join the ride up/down?
Thanks for taking time to read my newbie questions
Hi Tokiz,
Chart patterns appear on ALL time frames.
The only difference is that on small time frames, patterns (and technical analysis in general) are more reliable as they occur faster and are not affected as much by economical/political events as the larger time scales.
If you are planning to become a scalper (very short-term), then you will rely only on technical analysis whereas if you’re planning to go along the lines of a position trading (long-term) then you would primarily focus on fundamental analysis.
Therefore, higher time frame does not mean stronger chart pattern.
If you’re only on the stage where you are learning about chart patterns, I would advise to stay away from the market at all costs. Unless, you are planning to paper trade.
Personally, as a scalper, I do not rely on indicators but I use EMA as a guidance. You should study price action analysis in order to correctly identify and verify a trend or pullback reversal. SMA in my opinion is not enough to give me a confirmation to go long/short on a position. Study candlestick setups which do give you a much more reliable confirmations than solely relying on hope and that the price will bounce off the SMA.