http://www.fxstreet.com/education/forex-basics/how-to-correctly-identify-the-trend/http://www.fxstreet.com/education/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/education/forex-basics/how-to-correctly-identify-the-trend/2006-06-14.v03.htmlIn the previous two installments of this ongoing series of FX TradingBasics I outlined the methods I use for determining the trend. Intoday’s installment I want to discuss, how I combine multiple timeframe analysis and stochastics in identifying high probability set-upsversus low probability set-ups. First, some bullet points to outline my thoughts: 1. Higher time frames, generally, but not always, take precedent over lower time frames. 2. Stochastics, for me, are a filtering mechanism; notWed, 14 Jun 2006 16:04:55 GMThttp://www.fxstreet.com/education/forex-basics/dave@aspentrading.com (Aspen Trading Group)http://www.fxstreet.com/education/forex-basics/how-to-correctly-identify-the-trend/2006-06-14.v03.htmlhttp://www.fxstreet.com/education/forex-basics/how-to-correctly-identify-the-trend/2006-06-14.v02.htmlIn last week’s article I discussed the way I determine the trend priorto entering trades in the FX market. While the article was rudimentaryin terms of its approach, it drove the point home. Naturally, thedrawback to that one dimensional approach is that it only dealt withdetermining the trend on one time frame. While this style/approach maysuit some traders, I find it more efficient to look at multiple timeframes as a way to potentially increase the odds of success on a trade. This week,Wed, 14 Jun 2006 16:03:11 GMThttp://www.fxstreet.com/education/forex-basics/dave@aspentrading.com (Aspen Trading Group)http://www.fxstreet.com/education/forex-basics/how-to-correctly-identify-the-trend/2006-06-14.v02.htmlhttp://www.fxstreet.com/education/forex-basics/how-to-correctly-identify-the-trend/2006-06-14.htmlIf there is one piece of the trading puzzle that remains a bit unclearfor traders it is that of the ‘trend’. Depending on whom you speak to,each will have a different answer. Regardless, of their answer however,it is critical that you arrive at the correct answer in the context ofhow that person trades. Failure to correctly identify the trend willgreatly reduce the odds of success. The first place to start is identifying which time frame you planto make your trade off of. For me, I onlyWed, 14 Jun 2006 16:00:29 GMThttp://www.fxstreet.com/education/forex-basics/dave@aspentrading.com (Aspen Trading Group)http://www.fxstreet.com/education/forex-basics/how-to-correctly-identify-the-trend/2006-06-14.html