Newbie trend question

Hi,

I’m brand new into this “pips” stuff.
I started to learn from “school of pipsology” and I also opened an practice account on Forex.com.
I started to trade - demo - based on support and resistance levels feature, while I learn more.
Big question, however: usually I use the “tick chart” or very small time frames (1 minute or 5 minutes charts) for identifying trends. Is it correct?
Can you please share some experience with a newbie?

Thanks a lot,
Cosmin

I think you will get divided answers on this one. Personally, I am largely a trend-based trader, and I do not look for trend on the 1 minute chart, as I find that there is too much ‘noise’, it is just too choppy for me to find a trend that I would have any faith in.

I look for trend in the higher timeframes, typically two frames above the chart that I am seeking to enter on. So if the Hourly and 240 charts showed a clear trend, and that trend were supported on the 5 minute chart, then I would potentially look to trade it. If I saw what looked like a trend on the 5 only, but could find no support for that on the higher timeframes, then I would not consider that a trend that I would like to trade.

The key point is that one bar on the Hourly chart is 12 bars on the 5 Minute chart. So if the Hourly chart is choppy, it could still present as a trend on the 5 minute. So I would only see a trend on the 5 minute chart if it were supported by the same conclusion on a higher timeframe.

But there are traders out there, particularly closer to the scalping end of the scale, who might well disagree with me. People on both sides of the discussion can make good pips, so you will just need to identify the approach you feel most comfortable with over time.

I agree, I use the 5 min and 1Hr to trade, I do take a peak at the longer, but of interest more than anything.

1min charts, and tick charts are generally way too fast for spotting trends. It requires you to be glued to your charts watching every second, every tick go buy. Trading does not have to be that stressful or complex. For determining trends, I like to look at the Daily charts, or use the 4hr to 1hr.

There can absolutely be conflicted trends on the different time frames.

So for example the market can be showing a strong uptrend on the daily charts with the market posting higher highs and higher lows. But you take a look at the 1 hour charts, and you see them starting to roll over and the market may be starting a downtrend on the hourly charts.

When you see a conflicting signal like that it can mean a few different things:

  1. The market is pulling back to a key support area on the daily charts for a nice long entry
  2. The market is beginning to reverse the trend, it is just starting to roll over on the hourly charts.
  3. The market is sending conflicting signals, and you should probably stay out.

Hope it helps!

Thanks a lot for your replys.
I see your point about using 2 timeframes and I’ll try to give it a shot.
So, back into play on a new strategy (and back to school :smiley: ).
Thanks again.

Looking at H4 and D1 is important for S/R.