Right ok. So as an example the EUR/GBP 4 hourly right now is absolutely screaming overbought. So I drop down to the hourly and that’s also overbought. I drop down to the 15 minute and it too is also overbought! Awesome.
But then I go to the daily and it’s oversold 
So which one do I believe, the daily, or the smaller time frames?
Still getting it all wrong…
Assuming I want to trade EURGBP, then assume I love using only H4 to detect Oversold or overbought level. I go to my H4 right now and it is signalling over bought. It means I will be looking for only sell signal in the lower time frame say 30minutes. I move to my 30M charts and watch for a sell signal usually doing this through candlestick behaviour. Note that I don’t check if 30M chart is over bought or over sold. I just hunt for only sell signal using candlestick behaviour.
Again assuming I love to use only D1 chart to detect Oversold or over bought level. It means I only check if it is over sold or over bought in the D1 chart then I moved to the lower TF say H1 and look to buy only if it signal Over sold in the D1 chart. I don’t waste my time checking oversold or Over bought in that H1, I just look out for candlestick that signal me to buy only.
EURGBP has passed the oversold level a little bit in the D1 chart. If a trader bought when its over sold level were still fresh and low using H1 as his trigger chart (buy price action lookout), he would have made some pips. So do your work by backtesting. It sounds like a profitable setup
Why though? Why not sell the 4H oversold signal? How many pips do you try to aim for when trading these kind of signals?
So my EUR/GBP short just got stopped out. Even though the H4, H1 and 15M were all screaming overbought, the daily was screaming oversold. So the daily is the one that really matters it seems.
Another way to look at this - a certain type of entry opportunity occurs on a time-frame and statistically such signals have a validity of about 20 bars. If that time-frame is H4, what’s H1 or 15M got to do with it?
Making sure the higher time-frame filter is in alignment might raise the probability from moderate to high but it does not guarantee anything. You might ignore it, you might use a tighter SL, you might use a smaller position, you might use a tighter TP, you might use a less ambitious r:r. Nothing is ruled out, nothing is ruled in.
We use the H4 to see the future and the future says it is over bought. We should then look out to sell in the present (30M) because in the future there would be potential sell . If you wait to sell the 4H, the candlestick in the 30M would have go down several times up to 8 sell candlestick but in the 4H it would just be 1 sell candlestick.
I’m starting to think you’re on a wind-up mission.
So let me ask you.
If you saw a pair was overbought on the 4H but oversold on the 1H and 30M would you still sell? 
This is the dilemma my friend. One time frame is telling me to sell, the other is telling me to buy. I really don’t know how to explain it any simpler.
This isn’t my trade system. I trade naked chart. I was giving you an example.
That’s because your are trying to use D1, H4, H1, 30M, and all other TF as your Anchor chart.
I feel so stupid right now 
EUR/JPY approaching overbought on 15M https://i.gyazo.com/03489251b595c36337a7c7f4b9a04d68.png
EUR/JPY overbought on 1H https://i.gyazo.com/632d44040c7d61798b899d2973cf17d0.png
EUR/JPY overbought on 4H https://i.gyazo.com/4c4f606352a94bd616b3ad0007318dff.png
EUR/JPY just coming out from oversold on 1D https://i.gyazo.com/d121a209735a4b4cc916484adb23255d.png
So do I sell or buy? I literally don’t know which time frame to trust.
I can tell who not to trust - whoever told you that firstly you have to trust overbought/oversold indicators and secondly that before making a trade you have to check indicators in shorter time-frames than your trade strategy’s.
Your being whipped out by the smaller frames. Technically speaking EUR/JPY was oversold for me around the 118.596 mark and then was engulfed by a large bullish candle the following day. Right there my mindset would’ve been this is a cause for reversal and EUR shall MOST LIKELY rise which I did take a trade at the 120 level and have exited now.
I think you looking at the super small time frame won’t help because you’ll be witnessing a bunch of whipsaws and way more false signals vs if you used a longer time frame to get the BIGGER PICTURE of the trend that’s trying to play out.
@matty89 I think we have to get the forex trading perspective right first! Trading is a probability game, 50/50, therefore whichever timeframe you choose, you have the chance of 50/50 being right. Longer timeframe is for you to dictate the trends, up or down, but still with 50/50 chance. The shorter timeframe is for your timing of entry, yet still with 50/50 chance. So keep our trading simple with just one longer TF and one shorter TF. Don’t complicate our trading, accept imperfections in our trading strategy, embrace calculated losses as losing is part of the winning game, we have to learn to accept losses. Don’t over trade with too short TFs as trading is a minus sum game which will end up with losses not incurred by our trading results but by the commissions, spreads paid to our brokers! 
As a trader of 17 yrs not once have I used multiple timeframes to confirm anything
Overated hocus pocus in my humble opinion.
Figure out what timeframe you want to trade from and just trade from it.
That might mean adding a trendline or whatever, but the less confusion will help you no end.
You should be trading in the direction of the dominant trend. Which is the higher time frame.
If this is the way you want to go, consider including a trend filter like a moving average or the MACD.
For example, the moving average on the daily time frame is pointing up and price is trading above it.
Look for over sold conditions with your oscillating indicator on the 4 hour time frame to go long…
Then maybe, drop down to the 1 hour time frame to refine the entry even further.
Patience is also required for the right conditions to present themselves before trading. This should be a given.
You might want to look in to Alexander Elder’s triple screen trading system to get a better idea about what I am talking about. You should easily be able to find it.
In my opinion, trading using oscillating indicators alone is not enough to be consistently profitable. Without getting in to a debate about using technical indicators or not, I will just say, each to their own. But if it was that easy, everybody would be making money from trading.
Good luck.
I tend to use oscillators to spot divergences rather than oversold or overbought signals as quite often the price will continue to move when it’s saying overbought or oversold.
Here’s my strategy. I draw my support/resistance and trend lines on the weekly and daily charts. I then switch to the 4 hour and sometimes the 1 hour to look for reversal or continuation signals near these lines. I look for price action signals (wicks, engulfing candles etc) and I look for divergence on normally the rsi or stochastics. This is working quite well for me.
You’re thinking too hard about it imo.
The greater scale usually gives you the macro trend, the smaller ones the micro trend happening within them.
If the weekly candlestick is bullish that doesn’t mean that all the daily candlesticks are bullish. There’s always pullbacks happening on every scale, and you can technically trade all of these trends on all the charts if you’re good. Sometimes I’ll have over 1000 pips buy trade on the weekly, then some micro selling and buying opportunities in between. The way I view it is that the macro charts (D,M,H4) gives you the main trend and the smaller ones (H1,30M,15M) indicate the pullbacks and fluctuations happening within the macro trends. The “Micro” time charts I found most useful to find your optimal entry point.
One of the best traders I’ve ever met gave me the best trading advice I ever got: “there’s no strategy, read the charts and trade”.
Both short and long time frames have their own importance. Just because they don’t fit your trading style doesn’t mean that they are not worth it. Your focus must be on choosing a time frame that fits your trading. Like I am more into day trading, I prefer a 5-minute time frame over 15-minute time frame.
