Higher Time Frame Charts First
To gain the historical perpective needed to analyze markets,
we always start from the highest time frame chart. Figure 4-1
shows a monthly chart that supplies a fairly clear picture of the
levels that bound the USDJPY market from 1997 to 2008. Many
inexperienced traders make the mistake of thinking that a chart
with such a high time frame is not needed, particularly if they
are using charts with lower time frames. In our work we could
not disagree more. Any signal generated by a monthly chart
is significant.
We look at the long view first to get the big picture. On the
basis of where the market shown in Figure 4-1 has traded
over this long-term period, we can surmise that it’s not
unreasonable to see large, sustained price movements. This