The Three-Chart System

This is a well-known, popular, and effective tool. The reader will know it now from the discussion of its application to the PTS formation.

Each trader profile should use three FOREX charts with different time unit scales for each currency pair they trade. The middle chart is the watch analysis chart; use it to actually find trade candidates. The largest unit chart is the trend chart, used for keeping track of the primary trend. It provides perspective, so the trader does not lose the forest for the trees spending so much time on short-term charts.

The smallest scale chart is the timing chart, used to make entries and find stop-loss and take-profit levels with precision. See Table below.

[caption id="attachment_13282" align="aligncenter" width="511"]Trader Profile Charts Trader Profile Charts[/caption]

Tip: Do not extend to any three-chart method until you are fully confident analyzing a single time frame. Multiple simultaneous analyses without experience and defining rules can lead to chaos.

I would not trade without the three-chart system, although some trading methods such as the fire starter do not require it. Certainly, learn to analyze on a single time frame before attempting to use two or three

By Michael Duane Archer
Michael Duane Archer has been an active futures and FOREX trader for more than 35 years. He has worked in various advisory capacities, notably as a commodity trading advisor, registered SEC investment advisor, and branch manager for Heinold of Hawaii. He currently trades FOREX and futures and is involved in several technical analysis research projects.

Copyrighted 2016. Content published with author's permission.

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