Hi, fellow traders
I find that majority of traders have common problems when doing MTF (multi-timeframe) analysis, usually, most of the traders are applying the same strategy all over the timeframes, so they end up using entry strategy on higher timeframes, and then also on lower timeframes, which puts then in an ever-spinning situation, where they end up being too early or too late and flip flop all over the place.
it is important to understand :
1) you need flow / structure / direction analysis
2) that will enable to create trade plan
3) based on trade plan you execute your trading strategy
Regardless what is trading strategy: Elliot wave correction waves, harmonic waves, candle patterns, confluence of indicators, pivot points .... what ever. Strategies are mainly not problematic. What is problematic is where you use them. On the internet there is this false theory that strategies go through periods with profitable performance and that this profitable performance periods need to make up/cover up for the losing performance period. That Idea is generally false.
for Example:
If on given day,EUR/USD was trending LONG,
from 1.038 to 1.064 value, in London Session. Every strategy that gave LONG trade signal between 1.038 to 1.05 was highly likely correct, and trader pocketed few pips of profit.
THIS is not because of trading strategy, but because trader took LONG trades in UP MOVING DIRECTION.
Major problem with strategies is that they are used all over the place cross all timeframes.
If Price is moving up, majority of strategies that gave long signal in that UP MOVE , were correct, this has nothing to do with Elliot wave, or RSI, or MACD or Pivots. IF was long signal in long direction.
If we now return to beginning of this post:
Based on flow/structure/direction/bias analysis you can create you trade plan.
For Example: EURUSD was trending SHORT, it stoped at 1.035. Based on manipulation of LOW (price broke short, than imediatly retrace back to 1.035 and is now holding around 1.035 but above it) You can assume that there is:
A) no selling interest
B) buying value
Trader can't know which one it is, but can assume and speculate on future direction. Out of this information trader can create Trade plan.
FOR EXAMPLE: take every opportunity LONG between 1.035 and 1.065.
Many times traders MIX zig zag drawings , with trade plan. Now that the trader has some idea of what might happen. He/She can open up his strategy. And take only the trade signals in direction of his trade plan, within the given range. Meaning if speculation is that High will be at 1.065, taking a long trade at 1.06 would be too late. But taking long between 1.035 and 1.05 will give enough room to at least scale out if not closing the entire trade.
On the picture above, you can see what I use to determine direction. I seek potential Buying and selling values on HTF, after selling or buying value is confirmed I take trades in that direction on much smaller timeframe until Price action on HTF changes.
Cheers
I find that majority of traders have common problems when doing MTF (multi-timeframe) analysis, usually, most of the traders are applying the same strategy all over the timeframes, so they end up using entry strategy on higher timeframes, and then also on lower timeframes, which puts then in an ever-spinning situation, where they end up being too early or too late and flip flop all over the place.
it is important to understand :
1) you need flow / structure / direction analysis
2) that will enable to create trade plan
3) based on trade plan you execute your trading strategy
Regardless what is trading strategy: Elliot wave correction waves, harmonic waves, candle patterns, confluence of indicators, pivot points .... what ever. Strategies are mainly not problematic. What is problematic is where you use them. On the internet there is this false theory that strategies go through periods with profitable performance and that this profitable performance periods need to make up/cover up for the losing performance period. That Idea is generally false.
for Example:
If on given day,EUR/USD was trending LONG,
from 1.038 to 1.064 value, in London Session. Every strategy that gave LONG trade signal between 1.038 to 1.05 was highly likely correct, and trader pocketed few pips of profit.
THIS is not because of trading strategy, but because trader took LONG trades in UP MOVING DIRECTION.
Major problem with strategies is that they are used all over the place cross all timeframes.
If Price is moving up, majority of strategies that gave long signal in that UP MOVE , were correct, this has nothing to do with Elliot wave, or RSI, or MACD or Pivots. IF was long signal in long direction.
If we now return to beginning of this post:
Based on flow/structure/direction/bias analysis you can create you trade plan.
For Example: EURUSD was trending SHORT, it stoped at 1.035. Based on manipulation of LOW (price broke short, than imediatly retrace back to 1.035 and is now holding around 1.035 but above it) You can assume that there is:
A) no selling interest
B) buying value
Trader can't know which one it is, but can assume and speculate on future direction. Out of this information trader can create Trade plan.
FOR EXAMPLE: take every opportunity LONG between 1.035 and 1.065.
Many times traders MIX zig zag drawings , with trade plan. Now that the trader has some idea of what might happen. He/She can open up his strategy. And take only the trade signals in direction of his trade plan, within the given range. Meaning if speculation is that High will be at 1.065, taking a long trade at 1.06 would be too late. But taking long between 1.035 and 1.05 will give enough room to at least scale out if not closing the entire trade.
On the picture above, you can see what I use to determine direction. I seek potential Buying and selling values on HTF, after selling or buying value is confirmed I take trades in that direction on much smaller timeframe until Price action on HTF changes.
Cheers