Your time frame IS your outlook. A view of the U.S. Dollar Index

My day starts with a look at the U.S. Dollar Index for two reasons. First it’s a futures contract that I like to trade but second and just as important is the insight it offers into my forex trading.

So the discussion here is not only a look at the dollar but how you gauge where the dollar in heading depending upon your outlook which is essentially your time frame.

So here’s four looks at the dollar:

7-21-2009 6-16-42 PM.gif

The 30 minute chart with a lookback of about two weeks is showing that the current direction of the market is slightly distribution. A 30 minute time frame reflects a relatively short term psychology so if you consider that while looking at this next chart you’ll see the difference in not only direction but the overall sentiment it reflects.

7-21-2009 6-15-09 PM.gif

The trend here is markedly down…down…down..BUT it’s heading towards what could be a double bottom at 78.33. These are insights of a longer term intraday time frame. I am not going to demand that a 30 minute chart show me these types of set ups — like the potential double bottom — your analysis will reflect the time frame you are looking at as well as the amount of data you have on your chart. This should not be random; just as I put about two weeks on the 30 minute chart, there’s six weeks on the four hour chart. I will look at roughly four to six weeks on the 180 and 240 minute time frames.

Finally we come to the daily time frame which from a risk/reward standpoint may not be realistic for all traders to manage but does reflect the widest and probably most important psychology.

7-21-2009 6-15-59 PM.gif

The daily U.S. Dollar Index is slightly weak to neutral. While there is certainly weakness the downtrend has transitioned to more of a sideways market cycle.

Each one of these time frames of the same market, the dollar, reflects the psychology specific to that time frame. Consider this next time you hear a generalized comment like “the dollar’s in a downtrend..” and be sure to know what time frame is being talked about.

Follow me on Twitter!

  • pipsprof.

    Hello,Lady Raghee,Nice write up,been following your insightfull writings,kindly tell me a brokers trading platform where I can find the dollar volatility Index,especially, an MT4 platform.Thanks,I will be following you on twitter henceforth.

  • pipsprof.

    Hello,Lady Raghee,Nice write up,been following your insightfull writings,kindly tell me a brokers trading platform where I can find the dollar volatility Index,especially, an MT4 platform.Thanks,I will be following you on twitter henceforth.

  • philantropist

    y’all r doing a gr8 job over there. Just registered on babypips, n am xcited 2 b in d league of pip-pimpers. Got a little problem though, i need u 2 teach me d method of forecasting price on different time frames. Tanx a mill…welcome 2 my world…PHIL D GR8.

  • philantropist

    y’all r doing a gr8 job over there. Just registered on babypips, n am xcited 2 b in d league of pip-pimpers. Got a little problem though, i need u 2 teach me d method of forecasting price on different time frames. Tanx a mill…welcome 2 my world…PHIL D GR8.

  • http://www.ragheehorner.com Queen Cleopiptra

    Multiple time frame scanning is all about determining which time frame has the clearest psychology.

    Ok that sounds general until I define what that means. I scan the 15, 30, 60, 240, and daily. (You can add the 180 as well…) These time frames are showing me short to longer term looks at psychology. In other words the psych on the 15 could be bullish while the 60 is neutral and the daily is down. Each time frame therefore will most likely have a unique set up depending upon what the market cycle is: up, down, or sideways.

    Now the clearer I am can see the market cycle (using my Wave) the more confident I am that the strategy I am using is the right one.

    Price forecasting across different time frame must also take into consideration the pip range. Prices can move a whole lot more in 240 minutes than in 30 minutes. Furthermore, prices are likely to be more volatile during the hours of 8:00 to 11:00am EST.

    Take a look at PowerStats at

    link to autochartist.com

    …it’s a great free resource.

  • http://www.ragheehorner.com Queen Cleopiptra

    Thanks for the kind words.

    I recently downloaded an MT4 plug in that “…shows the relative strength of the USD in conjunction with the EUR, GBP, AUD, CHF, JPY, and CAD. It is basically the market index of the USD.”

    You can download the file here: link to bit.ly

  • http://www.ragheehorner.com Queen Cleopiptra

    Multiple time frame scanning is all about determining which time frame has the clearest psychology.

    Ok that sounds general until I define what that means. I scan the 15, 30, 60, 240, and daily. (You can add the 180 as well…) These time frames are showing me short to longer term looks at psychology. In other words the psych on the 15 could be bullish while the 60 is neutral and the daily is down. Each time frame therefore will most likely have a unique set up depending upon what the market cycle is: up, down, or sideways.

    Now the clearer I am can see the market cycle (using my Wave) the more confident I am that the strategy I am using is the right one.

    Price forecasting across different time frame must also take into consideration the pip range. Prices can move a whole lot more in 240 minutes than in 30 minutes. Furthermore, prices are likely to be more volatile during the hours of 8:00 to 11:00am EST.

    Take a look at PowerStats at

    link to autochartist.com

    …it’s a great free resource.

  • http://www.ragheehorner.com Queen Cleopiptra

    Thanks for the kind words.

    I recently downloaded an MT4 plug in that “…shows the relative strength of the USD in conjunction with the EUR, GBP, AUD, CHF, JPY, and CAD. It is basically the market index of the USD.”

    You can download the file here: link to bit.ly