Switching time frames is a sin of buying or selling a currency pair in one time frame and trying to close the trade in another time frame. An example: A currency trader buys a pair with the idea of capturing couple of pips in the short term but the trade doesn't work out as planned (going to hit the stop loss) and now the trader suddenly decides to keep the trade as an intermediate trade, so basically, the trader switches from a smaller time frame to a bigger one.
The problem with this "switch" in time frames is nothing more than a rationalization to ignore stops, it also protects traders from admitting they are wrong. Sound familiar?
Tips on How to Eliminate the Sin of Switching Time Frames
1. For each trade taken in one time frame, make sure to define your exit points in the same time frame - If you bought a currency pair based on the 30 min chart, make sure you use the 30 min chart to construct your exit strategies. Switching to the hourly, 4-hour or daily because the trade "doesn't look good" would be an act of denial.
2. Do not adjust your stop loss downward when you are in a long position, similarly, do not adjust your stop loss upward when you are in a short position - For instance, let's say you bought the GBP/USD at 1.8000 based on the 4-hour chart and you placed your stop on the same 4-hour chart at 1.7900.
When the GBP/USD declines and is close to stop you out of the trade at 1.7900, you decide to adjust the stop downward to 1.7800 or any lower price and only because now, you feel better again not being stopped out from the trade.
Summary
Do not let a loss turn into a disaster, this will happen if you keep adjusting stops downward when you are in a long position or upward when you are in a short position. You should be more concerned about avoiding big losses and less concerned about taking affordable losses. Currency traders guilty of the Sin of Switching Time Frames are really not fit for FX trading and the market won't tolerate their presence very long.
