Making trading decisions by looking at several timeframes first.

An unwritten rule that recommends that a trader should use three time-frames before they initiate a trade.

Proponents believe that looking at three time-frames will help a trader identify all the necessary points they need to execute a trade.

The rule of three is an essential trading strategy since it can help you avoid making simple mistakes like entering a short trade when an asset has just moved above a key resistance point.

• It helps traders identify trends in the market.
• It helps to confirm or invalidate the primary trend.
• It can be used to define potential entry and exit positions.

There are several benefits of using the rule of three in day trading.

• First, the long chart will help you identify the primary trend.
  • As such, it will help you make better decisions in the market.
• Second, it is a relatively straightforward strategy that you can use to enter and exit positions.
• Third, it is a rule that helps you identify support and resistance levels.

There is no correct answer to this since traders use different trading strategies.

• A scalper will often use different combinations compared to swing traders.