20/01/2026
Top down analysis in forex trading.
Top down analysis is an approach of determining the direction of the market from the higher time frame to the lower time frame.
Most traders miss out on doing a proper TDA reason the setback faced in the trading business.
In a nut shell, before you take any decision about any pair or instrument, you must start by going to the higher time frame to determine the market direction. The higher time frame tells us everything about what the market is doing, is it a bullish or bearish market.
Swing traders will often move to the monthly time frame to determine the market direction, then move to the weekly time frame to plot key zones and finally move to the lower time frames to look for an entry based on the direction of the monthly time frame, this is what we call Top down analysis .
Without Top down analysis, you are gambling, you are not trading, this is the reason over 80% of so-called traders are frustrated.
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