Timeframes for Trading Forex Sailing

Forex Sailing is a trading method that allows you to participate in online forex trading with only 15-30 minutes of effort per day.
Forex Sailing wraps up the important components of technical and fundamental analysis, but allows you to save time by only focusing on the important trades.
For the next few posts, I'm going to describe the Forex Sailing process. After these few warm-up posts I'll give you the entire Forex Sailing online forex trading seminar.
Key Trading Timeframe
With Forex Sailing, we'll be trading the 4-hour candlestick charts. Here's why this is a great timeframe to trade:

• A candle takes 4 hours to form
• Price swings take a few days to complete
• Checking charts once a day is usually enough (twice if you want to)
• Looking to capture 100-300 pips per move
• Makes the spread almost negligible

Forex Sailing is specifically designed for 4-hour charts. Once you get good, you could change to hourly charts. I recommend you stay with 4 hour charts as you'll be pleased with them. I'll be teaching shorter term forex trading techniques when I cover Forex Surfing in a few weeks.
Riding Big Waves
Before we sail the forex on 4-hour charts, we first need to look at daily charts to see the direction of the trend. The only thing you care about it the trend's overall direction. When you discover the trend direction on the daily charts (up, down or sideways) you will need to write it down.
To determine the direction of the trend, simple trendline breaks, support & resistance and basic technical indicators is all you need to use.
Forex Sailing Rule #1: NEVER go against the daily trend, ONLY go in the direction of the daily trend.
The daily trend is more powerful than the 4-hour trend. You NEVER want to go against it. Of course you'll miss trading the retracements, but you'll also avoid a higher percentage of "bad trades."
Scanning for Forex Sailing Trading Opportunities
Since you can NEVER trade against the trend, your first step is to look at the daily charts and see what the trend direction is. For each of the 6 major currency pairs, you'll want to WRITE DOWN the direction of the trend.
Here are the 6 major currency pairs:

1. EUR/USD
2. GBP/USD
3. USD/JPY
4. AUD/USD
5. USD/CHF
6. USD/CAD

Note: you can use Forex Sailing for ANY currency pair. For simplicity, I will only refer to these 6 currency pairs in the Forex Sailing course.
Within about 3-5 minutes you should be able to spot the direction of the trend for these 6 MAJOR currency pairs. In a trading journal (a cheap notebook), write the following down:
Date: Friday April 16th, 2010

1. EUR/USD – daily chart uptrend
2. GBP/USD – daily chart uptrend
3. USD/JPY – daily chart uptrend
4. AUD/USD – daily chart uptrend
5. USD/CHF – daily chart consolidation
6. USD/CAD – daily chart downtrend

Daily Trend Quick Decision for 3 of the 6 MAJOR currency pairs for online forex trading (click image to enlarge)

Now that you've written down the trend directions, you can start looking at the 4-hour charts for trades. The reason for this is when you see a forex trading opportunity in the 4-hour charts, you will ONLY go in the direction of the daily trend.
This means that you will only enter trades going long for the EUR/USD, GBP/USD, USD/JPY, AUD/USD. You will only enter short trades for USD/CAD. Since USD/CHF isn't trending, we will skip trading it.
This filters out a lot of trades and allows you to focus on a few trading opportunities at a time. On some days there won't be any trades to do. On other days there could be several trades.
Avoid Overtrading
The goal of a Forex Sailor is not to "always be trading forex."  There could be several days (even 1-2 weeks) when you aren't trading forex online at all!
This is ok!
Forex Sailing only looks at the sweet Forex trading opportunities and leaves the "so-so" trades for the Forex Losers.
Forex Sailing Daily Trend Analysis
At the beginning of each market week (starting April 18th), I'll provide a summary of the daily trend direction with forex chart shots of the 6 MAJOR currency pairs listed above.  The weekly report will also cover the news outlook for the MAJOR currency pairs.  If anything important happens during the week, I'll post it on the blog (it should be generally good for most of the week).
If you're subscribed to rapid forex's free 20 part forex trading eCourse, you'll automatically receive the Forex Sailing weekly market snapshot.

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