One of the biggest benefits of trading on a graph with a large time frame is that it acts as a filter of price movement. The volume exchanged daily on the forex is huge, therefore, the movements of short-term forex reflect only insignificant rumors of foreign exchange markets.

Originally posted by FXlord

One of the biggest benefits of trading on a graph with a large time frame is that it acts as a filter of price movement. The volume exchanged daily on the forex is huge, therefore, the movements of short-term forex reflect only insignificant rumors of foreign exchange markets.

 

Trading with higher time frames provide with much better and positive signals for the traders as they tell accurately about market behavious in long term and that is why it is good do do position trading based on higher time frames .

D1 and H4 charts provide information more useful and accurate price movement.

Trading on daily charts or H4 provides a clearer picture of what really happens in forex, as most rumors erratic short-term are eliminated.

This is probably a much better way of trading - most retail traders, myself included like to try and catch pullbacks, buy dips or sell rallies, yet when this occurs, the short timeframes would be different from the long timeframes, as you are trying to get in.  I wonder how much success someone would have, if they only traded in the direction when timeframes 15min up all lined up.