Every professional trader encourages novice traders to trade in a higher time frame. The importance of a higher time frame is frequently written in books and articles. But does that mean we can’t trade in the lower time frame? Well, the truth is, you can trade in the lower time frame but for that, you have to be extremely skilled. In general, rookies start their careers without having strong knowledge about this market. They don’t have the skills to deal with the short-term movement in the price. Thus when it comes to lower time frame trading techniques, they mess things up and blow up the trading account.
So, what’s the process to learn a lower time frame trading strategy? Don’t worry! We are going to give you some amazing tips which will allow you to trade in the lower time frame without having any difficulties. Let’s get into the details.
Learn multiple time frame analysis
To trade in the lower time frame, you must be good at multiple time frame analysis. Without learning to evaluate the price action signals in the different time frames, you should never try to trade in the lower time frame. The multiple time frame analysis process will work as a trade filter tool and let you trade this market with strong confidence. This will make you more skilled and let you trade this market with an extreme level of precision.
However, you might get confused by seeing different kinds of trading signals in different time frames. In such a case, you should be looking at the higher time frame trade signals. Thus multiple time frame analysis will work as a trade filter tool.
Study the candlestick pattern
Those who want to master the art of scalping must be good at analyzing the major candlestick patterns. Without learning to analyze the key candlestick patterns at the critical trading zones, no one can trade in the lower time frame. For that, you might have to trade in the demo accounts for few months. But make sure you get it from high-end brokers like Saxo so that you don’t have to deal with technical problems.
Learn about the different candlesticks patterns in the paper trading account see how the different trading levels work with the different formations of the candlesticks. Once you become good at analyzing the candlestick, you should be able to execute quality trades in the market.
Study the major chart pattern
The professional scalpers always use the major chart patterns formed in the lower time frame. It helps them to secure big profit within a short time. So, you also have to learn about the chart pattern trading strategy to become good at a lower time frame trading strategy. At the initial stage, learn about the continuation pattern and then move to the reversal trading strategy.
It would be wise not to focus on the top and bottom of a trend. If you intend to trade at such a level, you must relate the technical factors with the news data. Unless you do so, you will keep on losing money in the lower time frame.
Use smart indicators
Filter the bad trade signals in the lower time frame is a very tough task. But if you rely on smart indicators, you should be able to find the best trade signals in the market with a high level of precision. Never expect that you know everything about this market. Explore the functions of the indicators in the demo account and try to develop your skills as a professional trader. Test different settings and make sure you feel comfortable with the tools.
But do not make the scalping system overly complex. If you do so, you will never earn money consistently in the lower time frame. So, try to keep the overall trading process simple and trade this market with low risk. And if possible, use simple indicators to filter out the low-quality signals.