Forex Multiple Time Frame Momentum Strategy

Forex Multiple Time Frame Momentum Strategy Now let’s look at the fifth weekly momentum trend shown earlier on the weekly chart, the bullish momentum period from the week ending April 8 though the week ending June 17. The daily chart shows three daily momentum bullish reversals during this period.


The first daily momentum bullish reversal was not made until about three weeks after the weekly bullish momentum reversal. The daily momentum was overbought through most of this period, which is a typical momentum position in a strong trend. The first smaller time frame daily momentum bullish reversal (point 1) was made just before a
price high followed by a corrective decline that lasted several days. It would have been a no-trade or small loss. The second daily momentum bullish reversal was followed by a consistent rally of several points. The third and last daily momentum bullish reversal for this weekly bullish momentum period was made just before bonds made a significant high—another no-trade or small loss.I purposely chose this 18-month period for bonds and the weekly and daily data because it illustrates most conditions you will run into with Dual Time Frame Momentum.

Strategy setups. There were periods for strong winners; periods of price/momentum
divergence that still would have resulted in some gains; periods of marginal gain because the smaller time frame reversals lagged the higher time frame momentum reversals; and at least one period that would have probably resulted in a small net loss.
I could have easily filled the chapter with unlimited examples of ideal setups that
always resulted in massive profits, like so many other trading books and educational
courses do. That is not the real world of trading. Yes, there can be some quick and significant gains. But there will always be periods when either the market does not set up for potential trades according to your trading plan or, regardless of your trade plan.