Top Down Analysis 101: Getting started

13 oct.

📖 Forex Top-Down Technical Analysis

🔸Top-down technical analysis is a method used by traders to examine the Forex market starting from higher time frames and gradually zooming into smaller ones. 🔸This approach helps traders get a comprehensive view of the market, starting from the broader trend on long-term charts and then analyzing intermediate and short-term charts to find precise entry and exit points.

📩 Here’s a step-by-step breakdown of how top-down analysis works in Forex trading:

1. Start with Higher Time Frames
🔸Begin by analyzing the market on the higher time frames to understand the dominant trend. Typically, traders start from the Monthly (M), Weekly (W), or Daily (D) charts.

🔸Monthly Time Frame: The monthly chart provides a bird’s-eye view of long-term trends and key levels of support/resistance. You can observe the major direction of the market, whether it is trending up, down, or moving sideways. This is where traders establish the broader market context.

🔸Weekly Time Frame: Moving down to the weekly chart helps to refine the broader trend you’ve identified on the monthly chart. It reveals more intermediate levels of support and resistance, trend lines, and key price action patterns that can influence the market over a few weeks.

🔸Daily Time Frame: The daily chart helps traders zoom in further to find relevant market structures, patterns, and price movements. It also helps you evaluate the short-term trend while keeping the long-term trend in mind.

📩At this stage, traders may look for things like:

🔸Trend Direction: Is the market in an uptrend, downtrend, or range-bound (consolidation)?
🔸Support and Resistance Levels: Key horizontal levels where price has previously reacted.
🔸Price Action Patterns: Candlestick patterns (e.g., engulfing patterns, pin bars) that indicate potential reversals or continuations.

2. Analyze Intermediate Time Frames
🔸After understanding the overall trend on the higher time frames, move to intermediate time frames like the 4-Hour (H4) or 1-Hour (H1) charts. These time frames give you a clearer picture of more recent price action and finer details for your analysis.

🔸Identify the Current Market Structure: Look for things like the formation of higher highs and higher lows (indicating an uptrend) or lower highs and lower lows (indicating a downtrend).

🔸Find Consolidation Areas or Breakouts: These time frames are useful for spotting breakouts or consolidations that may indicate the start of a new move.

🔸Refine Support/Resistance Zones: Draw closer support/resistance levels that are relevant to the current price action.

🔸This step helps you align your understanding of the intermediate trend with the higher time frame trend.

🎁Please hit the like button and
🎁Leave a comment to support our team!

RISK DISCLAIMER:
Trading Futures , Forex, CFDs and Stocks involves a risk of loss.
Please consider carefully if such trading is appropriate for you.
Past performance is not indicative of future results.

14 oct.

Note

80% gains AMD/NVDA Pairs Trade: Best Level to BUY/HOLD AMD

14 oct.

Note

75% gains BUY/HOLD IWM/RUS2K C*H trade setup

14 oct.

Note

Become a TOP 1% Trader

14 oct.

Note

How much money can you make in Forex?

14 oct.

Note

TSLA: 125% gains Best Level to BUY/HOLD

14 oct.

Note

14 oct.

Note

Types of traders 101

14 oct.

Note

14 oct.

Note

Rags to Riches in 10 trades: Anyone can try start with 100 USD

15 oct.

Note

16 oct.

Note

17 oct.

Note

18 oct.

Note

19 oct.

Note

Replace a 100 000 USD salary with income from trading

20 oct.

Note

Getting Started with Forex Prop Trading: Intro Guide

22 oct.

Note

Best Level to Short USDCAD TP +260 pips

24 oct.

Note

EXCLUSIVE EWTX 350% BUY/HOLD techs/fundies with catalyst

26 oct.

Note

algo trading

27 oct.

Note

How to avoid being emotional in trading?

29 oct.

Note

29 oct.

Note

King Dollar Reigns Supreme: DXY Strategic Outlook