Daniel explains the difference between higher term time frames and lower term time frames in trading. He uses higher term time frames to find the best trade entry zones, and lower term time frames for precise entry triggers. This approach provides smaller invalidations and higher probability trades compared to using only higher term time frames. Daniel also emphasizes the importance of using order flow when trading Bitcoin on lower term time frames.
Timestamps:
- [00:01:06] It's important to understand higher and lower term time frames because they are used interchangeably when taking trades.
- [00:01:38] Lower term time frame is anything below the 4-hour chart, while higher term time frame is the 4-hour chart and above.
- [00:02:48] Medium term time frame is using a lower term time frame chart view lasting one week or less.
- [00:04:43] Example of a medium term time frame setup traded on the lower term time frames.
- [00:05:24] Always use the lower term time frame to trade higher term time frame setups for more precise entries and smaller invalidations.
- [00:06:51] Example of a higher term time frame setup with a lower term time frame entry trigger.
- [00:08:17] The best time to look for longs is when the higher term time frame is bullish, but the lower term time frame is bearish (and vice versa for shorts).
- [00:10:27] The primary difference between lower and higher term time frame trading is the addition of order flow on the lower term time frame.
- [00:11:46] Order flow is necessary for trading Bitcoin on lower term time frames.
- [00:12:25] The 30-minute chart is Daniel's go-to time frame for intraday viewpoints, as it correlates closely with the TPO chart.
- [00:14:11] The 15-minute chart is used earlier in the day when there is less data, while the 3-minute chart is preferred for entry triggers when the action is happening.
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By understanding and utilizing both higher and lower term time frames, traders can improve their entries, reduce risk, and increase the probability of successful trades. However, it's important to note that while order flow is advantageous, it is not strictly necessary for trading lower term time frames. Implement these concepts into your trading strategy to potentially enhance your edge in the markets.