Synchronization can be defined, according to businessdictionary.com, as the “process of precisely coordinating or matching two or more activities…or processes in time”.
Well, what we’re looking to match in Trend Synchronization is simply the forex market trends across various time frames.
I’ve written before here about “rolling up” (or down) trends as being one of the strongest and easiest to follow trend indicators.
Rolling up or down refers to the successive trend directions given across different time frames:
Whenever there is a trend change, it is indicated first on the 1-minute time frame chart, then on a 5-minute chart, then 15-minute, 30-minute, 1-hour, 4-hour, daily, weekly, etc.
But here’s the thing: there are many, many times when the trend changes (at least temporarily) on a shorter time frame chart, but an indication of trend change on longer time frames never follows. For this reason, it’s important to always be aware of the trend as indicated all the major time frames and how to identify trends in data.
You can certainly trade using a 15-minute chart as your primary reference, but you will trade much more successfully if you’re aware of whether or not the current trend on the 15-minute chart is in sync – agreement – with the trend as shown on longer time frame charts. If it is, if the trend is synchronized across multiple time frames, then there is a much higher probability that you can ride a trade-in that direction for substantial profits. Also, read the approach to currencies by Warren Buffett.
Why identifying trends is important:
Synchronizing the trends accomplishes 2 goals simultaneously which are the 2 most important things to do for making more money in your account:
- Increases your Profit potential on each trade (and R:R) by letting the trend carry trades further.
- Boosts accuracy because the power of multiple trends is pushing the price in your direction.
If on the other hand, higher time frames are still showing a distinct, longer-term trend in the opposite direction from what’s showing on your 15-minute chart (or whatever TF you're trading), then the price is likely to reverse at any time thereby reducing the probability of winning your entry.
The Problem with tracking Trend Synchronization.
Well, the trouble I have is that I’m forgetful, inattentive, impatient, and lazy. Other than that, I’m a perfect trader.
But, seriously, here’s the thing:
When you’re trying to monitor the market, follow the news, analyze potential new trades on multiple currency pairs, AND return your girlfriend’s phone call, it’s just very easy to fall into the habit of not regularly checking the current trend across every time frame from 1-minute all the way out to the daily time frame.
And even if you were diligent enough to do that (doubtful, really – when I’m trading off the 1-hour chart, I can honestly say that I do not faithfully check the trend on the 5-minute chart every single 5 minutes), that's a lot of work and effort...
And 9 times out of 10, the trends are not going to be lined up and so it is a lot of work and effort for no gain. We also have training for the Average True Range Indicator.
Winner’s Edge Trading has a tool available that automatically keeps you continually updated as to the existing trend on all the commonly used time frames—all from whatever TF you happen to be on at any moment.
A cute little box that sits out of the way on one side of your screen and that shows you at a glance whether short term and long term trends are synchronized – all pointing in the same direction – or not.
Now, you certainly do not need this tool to use what I have shared in this article. I highly recommend you sync your trends whether you want anything from us or not...
But with that said, we highly recommend these tools because TREND is SO important and the Break & GO tools do more than just give you the trend.
Using the tool is a lot easier than manually changing the time frame in your chart window 7 or 8 times – Not to mention the fact that by the time you get all the way to the daily time frame, you may have forgotten…”Was it the 15-minute or 30-minute chart that was showing a downtrend?”…
Instead, this fantastic tool provides you the complete spectrum of trend indication across multiple time frames in a clear, visual representation. It will also help alert you to potential trend change at pretty much the earliest possible moment.
In short, it provides you with important information in an easy-to-see visual format and simplifies your life as a trader by putting the information right at your fingertips with the click of your cursor.
Get the Break & Go Tool Here:
Oh, and the trend is just one feature of the Break & Go tool. To learn more about them, Click Here.
We have tried to make it as easy as possible to be continually aware of the trend across multiple time frames and to instantly be notified of trend change whenever it occurs on any time frame.
Soooo…Get it. 🙂 – (it's on sale here)
And even if you're not interested in our tools, be sure to let me know what you thought of the synchronization idea and if you plan on using it to improve your trading.
Best wishes in your trading, and please feel free to share this article across social media or scribble any comments/questions below.
Yours for Trading Strategy Guides,