Nick Goold
Why Momentum Matters When You Enter a Trade
Prices can be rising on the hourly chart while falling on the five-minute chart. If the hourly trend is up, look for a chance to buy when the price starts rising again on the five-minute chart.
For some trades, a small move higher may be enough. For others, you might wait for the price to rise above a recent high on the five-minute chart. If the hourly trend is down, look for a chance to sell when a short rise ends and the price starts falling again.
The interactive lesson below shows how to use a higher timeframe to choose your trade direction and a shorter timeframe to time your entry.
Choose Your Direction on the Higher Timeframe
Start with the higher timeframe and look at where the market has been moving. If the hourly chart is trending up, look for a chance to buy. If it’s trending down, look for a chance to sell.
The higher timeframe gives you a direction to trade. Then switch to a shorter timeframe, such as the five-minute chart, to decide when to enter.
Wait for Price to Turn in Your Direction
If you want to buy a pullback, watch for the price to start moving up again. If you want to sell after a bounce, watch for it to start moving down again.
Decide in advance what will trigger your entry. You might enter on an uptick or a downtick, or wait for the price to move past a recent high or low on the shorter timeframe.
Check That the Entry Still Makes Sense
Sometimes the price turns and moves quickly. Before you enter, check where your stop would go and how much you would risk at the price you can get now.
If the move has already gone too far for the trade to fit your plan, let it go. You can wait for another pullback or look for the next setup.
Review Your Timing
After the trade, look back at both charts. Was the higher timeframe moving in the direction you expected? Had the price started moving that way on the shorter timeframe when you entered?
If you entered early, write down what you could wait for next time. If you followed your entry rules, record what happened so you can compare it with similar trades over time.
Keep Building Good Trading Habits
Waiting for the price to move in your direction takes practice. Visit the Titan FX Education Hub for more lessons on reading charts, planning trades and managing risk. Try the interactive exercises and quizzes to put what you’ve learned into practice.
Explore the Titan FX Education Hub
Access the market analysis tools in the Titan FX Research Hub to see which markets are moving, check momentum with moving averages and RSI, and find key support and resistance levels before planning your next trade.
