How Would You Use Timeframes in this NZDCAD Setup?

Hello forex family!

In honing my trading strategy, I’ve come across this example and am curious about how you would approach it.

On the daily chart, NZDCAD setup looks like this

Price is approaching the top of the channel, and is printing a pinbar (at the time of writing) just above the 0.8500 level. No divergences happening with the Stochastic so seems like potential reversal but no aggressive signals.

However on the 4H chart, NZDCAD gives a little more away

Here, we see the 200 MA holding as resistance and obvious bearish divergence on the Stochastic indicator. This seems to be a much stronger sell signal!

The question is: where do you find the balance between keeping things simple and having enough confirmation? In your experience, what is the validity (or not) of using the 4H chart alongside a Weekly and Daily chart?

Well, my strategy is: tracking the market trend on D1 & for entry+ exit; I prefer H4 & H1.

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If you want to go short based on the 1D chart, you can use the 4H to look for a good entry. For example, you drew divergence on your 4H chart. Right when the candle closed with a higher swing high but your oscillator made a lower high, you could’ve entered short.


Thanks Luke and ForexGump for your responses!

I’ve added 4H charts to my strategy. I can only trade in the evenings and weekends, so I’ll be using the lower time frame as confirmation, and to help pinpoint potential entries, stops and profit targets.

I don’t look at intra-day charts but to counter that I never enter a trade live, only through orders that are set ahead of price. Its a conventional approach, and on this market I would be happy to set a sell order below the low of the pin bar. A more cautious approach would be to put the sell order below Monday’s low.

On a wider perspective, there is nothing bullish about NZD’s situation or its performance v’s other currencies. CAD is strong almost everywhere and is supported by the high oil price which looks bullish enough to rise further, aided by geo-political concerns.

Thanks for the insight and the fundamental analysis touch to back up current price action.

I understand, that way you’ve built a system where you can look at charts after the bar closes, and still get in at the ideal price during the day

good post i like it