Trading price: correlation of temporalities


Today we are talking about the correlation of temporalities. This lesson number 5 brings us to the end of this trading course. We hope that all information has been very useful for you. You can attend the other lessons by following this link.

Lesson 5 commercial course to learn from scratch

Here is the topic that I think is most important in this course, in which everything that has been learned is put into practice. Let’s do it.

What is the temporal correlation?

It consists of a trader’s ability to make forecasts from analysis of the macro to the micro. That is, you review large timeframes and relate them to what you see in small timeframes for more accurate market entry.

Those who do trading are aware that charts tend to provide more reliable signals at higher times. However, it is very difficult to take an opportunity that is based only on large graphics. Well, it is possible that much of the expected movement is gone and just waiting for confirmation.

Just as it happens when you enlarge a picture and watch the noise grow bigger, so does the price chart. There is much more noise in a 1-minute candlestick chart than in a daily chart. Therefore, they tend to give more wrong signals than in a diagram with longer timings.

For this reason, it is necessary not only to know what a temporal correlation is, but also how we can use it to our advantage.

How can you use that?

The main idea of ​​using time correlation is simply to reduce the risk.

As an analyst, you should review the big picture and understand that large timeframe signals are much more reliable.

Find zones of support and resistance in your main temporality so that the structure / tendency follows. It is recommended to use candlelight cards of 4 hours or more.

Wait for the price to reach your expected range. Patience is the key.

Remember that the markets move through impulses and setbacks. Always try to take advantage of the longest movement, the swing.

Once in the area, time is decreasing and it is starting to see if it is really respected and to gain control of the buyers or sellers you need.

Chart patterns and reading candlesticks are beginning to come in handy at this stage. In large timeframes, they will be too, but keep in mind that if you check diagrams with smaller candles, you can use the same pattern observed in a large timeframe multiple times.

The expected control of both sides has arrived. To take advantage of the correlation of timing, all you have to do is press the trigger, position the stop loss, take profits and let the market do its job.

Let’s look at an example below::

Bitcoin vs. US dollar chart

Daily seasonality

Temporality of 4 hours

BTC USD chart. Tradingview font.
BTC USD chart. Source: trade view

I don’t think there is much to clarify, the whole explanation is in the pictures.

There you can realize the large number of entries that you can make by looking for signals on the 4-hour chart after observing the inability of sellers on the daily chart to continue the previous trend.

And this only relates to two temporalities, the same thing you could do, even diagrams with tiny candles; However, you should consider the reliability of the signals and the volatility observed over short periods.

Finally, keep in mind that the graphs you want to correlate should not be too far away, as the relationship between the two may be severely lost.

Gradually going down and watching the domino effect between the different timeframes gives you better chances where the reward can far exceed the assumed risk.

Did you like the trading price?

And so we come to the end of this free trade course that will teach you from scratch everything you need to start in this wonderful world.

I believe that what I have taught you is enough to make money in the financial markets. It is up to you to start practicing. Well, here you will refine your eyes to identify and take advantage of the repetitive behavior of traders.

Remember that uniting all the concepts you have learned is the key to developing a successful trading strategy.


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