In a low volatility environment like we have now, it can be helpful to move down to the hourly chart to find a trade in the direction of the trend on the 4-hour chart. Normally we trade on the 4-hour chart in the direction of the trend on the daily chart. Another choice is to take a closer look at the daily chart to see if there are any potential trades. Volatility can decrease just before a change in direction on the daily chart, so we need to be aware of that possibility. Here is a daily chart of the GBP/JPY and we can see a series of higher highs and higher lows within a channel. This pair has now pulled back off of the high to a level where it may have found some support. This is a classic buying opportunity and traders who use the daily chart for their trading are now looking to use their favorite approach to time their entry. This is worth watching since most of the big traders trade off of the daily chart. If you are a short-term trader, this is also worth watching to note that moment when you should be looking for buys instead of sells on the shorter-term charts. Trading with the momentum of the market can increase our chance of success, so we want to take advantage of this instead of giving it away to the trader on the other side of our trade.

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