Using two time frames is a common practice in the Technical Analysis. For example if you trade a trend following system you have to determine the general trend direction in one hand and in other you have to recognize the exact entry / exit levels.
Normally a long period chart is used to catch the trend. Once the trend direction and strength have been confirmed, a shorter period is used to precise the deals.
Since Forex Strategy Builder uses one chart only to perform a backtest we use indicator scaling.
Let see the next example:
EURUSD 1Hour chart
- Eneter long at the upper Bollinger band (Period 20, 2) when
EURUSD 1Day chart
- Simple MA (5) rises.
Close at: 1Hour chart Parabolic SAR.
We do this using a MA(120) on the 1Hour chart. It is almost same as MA(5) on a 1Day chart. 5 * 24 = 120
We set in Forex Strategy Builder
Market: EURUSD 1 Hour
[Opening Point of the Position]
Bollinger Bands
Enter long at the Upper Band
Smoothing method - Simple
Base price - Close
MA period - 20
Multiplier - 2
Use previous bar value - Yes
[Opening Logic Condition]
Moving Average
The Moving Average rises
Smoothing method - Simple
Base price - Close
Period - 120
Shift - 0
Use previous bar value - Yes
[Closing Point of the Position]
Parabolic SAR
Exit the market at PSAR
Starting AF - 0.02
Increment - 0.02
Maximum AF - 2