How to setup the Forex charts? The best way to setup the Forex charts is to decide which timeframe you are going to trade. Suppose, you decide to trade the 5 minutes charts. This is the timeframe that you will use to enter and exit your trades. But, before you enter any trade on this chart, it is always a good strategy to first confirm the trend on the 15 minutes charts as well as on the 30 minutes charts.
Let me explain. Suppose, you live in London. This summer, you will go to Switzerland, Geneva for one week with your family. How do you plan your trip? First you will go from London to Geneva. You might go by air, you might cross the Channel by a ferry and then take a train. Suppose, you decide to go by a car.
So, first, you will take a general map of Europe and start planning your trip. First London, then Dover, then Calais, then Paris and so on till you reach Geneva. This map will show you the best route from city to city. At this stage of the journey, you don’t need to know about the small details in any city.
Just in the same way, always confirm the trend on a bigger timeframe like the hourly charts or the daily charts before, you open the 15 minutes chart or the 5 minutes chart. Once, you reach Geneva, you will need a detailed map of the city as a tourist, where are the best hotels to stay, what are the best places to visit, where you should go and where you should stay stiff like that.
This is like opening the 15 Min chart or the 5 Min chart to decide upon the exact details of your trade. So, in nutshell, you should always move from the higher timeframe chart where you confirm the trend, then move on to the smaller timeframe chart where you again confirm the trend to finally the actual chart that you will use to enter and exit your trades.
Always start from the bigger picture and then move down to the smaller picture. A good trading system always uses higher timeframe charts to spot a trend, then confirms that on the smaller timeframe charts and when all the charts are confirming the same trend, it enters into a trade on the smaller timeframe.
So, you might confirm the trend on the one hourly chart, then confirm that on the 15 minutes chart and finally use the 5 minutes chart to enter and exit your trades. Good Luck!
Source by Ahmad A Hassam