Why do I like the 6 Hour chart? Not many use it. Most traders use standard time charts, so using less common parameters for your trading can place you ahead of the pack thanks to how to using unique information to make trades.
Note: Using custom time frames is something that you might not be able to do on your current broker, so make sure that’s available if you want to use it. If your broker doesn’t support this feature, then you may want to start looking for another one for the long term.
1. Trading The 6 Hour BTC Chart Without Indicators
As I’ve stated previously, price action is a very powerful and versatile indicator in its own right.
That’s because all other tools are really just ways to simplify the information provided by price action and are derived from price action. Hence, elite traders rarely use indicators and they can obtain all the information they need just by looking at the candlesticks alone!
So, let’s see how I traded this 6H chart just by using price action:
I start seeing how the price started to lose momentum after the September 2nd candle, so I started plotting a trade; I waited for confirmation.
The confirmation came when the next movements, signaled by the red arrows, started to prove that momentum was, in fact, dropping, so I waited for a big bearish swing to hop in.
After the huge drop on the second candle on September 5th, I immediately jumped in as soon as I saw another candle forming, and I decided to ride the trend without a fixed Take-Profit order but with signals from the price action instead. My Stop-Loss was above the swing high - a little bit of a higher stop-loss here, but this was a high probability trade in the direction of market momentum so the wider stop wasn’t likely to be reached.
When the few counter movements started to appear, I placed a TP on the same price as the close of the last consecutive bearish candle ended so I could take back that number and not risk anything else. The TP was then met a day after, netting a whopping 500 points in profits!
2. Trading the 6 Hour BTC Chart With Indicators
Now, let’s take a look at this chart:
Can you tell why I used these three indicators? Let me tell you my entry and exit points for this SELL position:
I enter at the 6,700 mark and exit at 6,450 because my indicators signaled it.
The trade followed three simple steps:
6-hour time-frame trading is a little bit different - something between swing and position trading. But you will be able to find very nice trading signals here - especially with loosing and increasing momentum in the market moves.
I would definitely recommend checking the 6-hour charts when trading BTC & Crypto as well!
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