Proper use of Timeframes

[gemmabug]

Hi There,
Firstly, I'm quite new to this forum I'd like to thank Black Knight for providing such a fantastic and useful resource for traders.
I've learned so much already.  I am interested in starting up with the Pro Group in the near future but need to do a little more homework first. 
There's just one thing I'd like to get clear regarding the use of multiple timeframes.  When Black Knight explains it, it all seems so clear but
when I go to my upper and lower timeframes I have trouble getting my head around the whole issue.

Could someone maybe let me know if I'm on the correct path with this.

Say I'm using a 4hour and 1 hour timeframes.  On the 4hr chart if ADX is above 30, I go to my 1 hour timeframe.
If ADX is also above 30 on the lower timeframe, I look for an entry signal in the direction of the higher timeframe.  If ADX is below 30 on the lower timeframe I stand aside.
On the 4 hour chart ADX is below 30 and obviously ranging, is this a sign to stand aside and not even look at the lower timeframe?

I know I'm probably overcomplicating things but just need to get this clear in my head before I can move on.
Thanks so much,
Gemmabug

[1greyfox]

Hello gemmabug.

Welcome to the forum and to forex trading.

Based on your question I will make the assumption that you are looking for trend following trades.

ADX doesn't haven't to be above 30 on the 4h chart before you switch to the 1h chart when looking for a trend trade.  The upper timeframe is used to help you determine a direction before looking to the lower timeframe chart for a possible trade setup.  After you have determined what type of trade you will be looking for is when the switch to the lower timeframe chart would be appropriate.

After switching to the 1h chart the first thing I look for is whether price is between the upper and lower time frame 21EMA.  If it is then I would pass on a trend trade until price is no longer between the 2 moving averages.  So, if I am bullish I would wait until price is above both 21EMA's before looking for a long entry.  The adx on the 1h chart should be moving toward or above 30 which indicates that momentum is building for price to continue in that direction.  With adx moving towards or above 30 I would look to the OsMA indicator to see if it is agreement with the current price action, if it is then I would look for other reasons that could be used to support taking the trade.  Also, if adx is moving toward 30 but hasn't broken above it yet I will look at Stochastic to see if it is also showing itself to be bullish.  The more things in agreement for the move the better the chance of a successful trade.

If you haven't already watched the recorded webinars that BK has done, you may find them useful in helping you become familiar with the techniques BK teaches in the Pro Group.
The webinars for fxstreet can be found here.
http://fx-knight.com/smForum/index.php?topic=146.0
The webinars for ForexPros.com can be found here.
http://fx-knight.com/smForum/index.php?topic=480.0

You can also enjoy watching a free session of one of the Pro Group sessions and also learn about becoming a Pro Group member at this link.
http://www.fx-knight.com/join.html

I don't believe you overcomplicated things, but I may have with my reply.  If you have more questions feel free to ask and I will attempt to be of service.

Happy pipping!
1greyfox

[gemmabug]

Hi Greyfox,
Thanks for your reply.  You have certainly cleared things up for me.  I think I'm starting to understand a little better. Have worked my way thru most of the videos, just a few to go.  I think I may go over them all again just to make sure I understand. 

With regards to the Pro Group, do you get a clear outline of the rules for taking trades or is it just talked about in the daily sessions?

Thanks Again,
Gemmabug

[1greyfox]

Hi Gemmabug.

When you join the Pro Group you will be granted access to the Pro area of the forum which contains 30-40 hours of introductory session recordings which cover the basics of how the templates and indicators are used.  There is also a section of recordings available which other members felt should be permanently archived when a specific topic was covered.  During the live sessions BK does cover the what you should be looking for when considering a trade, whether it is a trend, range, or countertrend.

Other sections of recordings also available include "60 day challenge", "Belt Test", and we archive daily session recordings, these are available for those times when/if you miss a session or lose your internet connection during the live session, there is a copy available within a few hours of the session ending.

I have also archived recordings of our "Tactical Tuesday(Long term analysis)" and "Thoughtful Thursday(Psychological improvement)".

During the live sessions you are encouraged to share your thoughts, questions, experiences, charts, etc.... so that BK and the other instructors and Pro Group members may be able to help you with an area you are currently having trouble with, or when you are advancing from learning one type of trading to another(trend, range, counter-trend).

As you can tell there are a lot of resources available when you become a Pro member.

I hope to see you in the Pro room.  In the meantime, if you have more questions feel free to ask, and either I or one of the Pro members will be glad to help you.

Have a great day!

1greyfox

[gemmabug]

Thanks so much for your comprehensive outline.  Sounds like it is exactly what I need to move to the next level.  I can't wait to get started in the next week or so.

Thanks Again,
Gemmabug