Using Multiple Time Frame Analysis to Enhance Trading

Success

What is Multiple Time Frame

Analysis?cc: LendingMemo - https://www.flickr.com/photos/92802060@N06

MULTIPLE TIME FRAMES

• The idea is to observe different time scales on the same instrument to identify market behaviors and trends on those timeframes which would help us to recognize what is happening on those time frequencies.

Segment your analysis into three distinct time

horizons, the trading time frame, the bigger picture

time frame, and the execution time frame.cc: Leo Reynolds - https://www.flickr.com/photos/49968232@N00

The first time frame to consider is the trading

time frame. This is where we are scanning for

setups and signals.cc: CarbonNYC [in SF!] - https://www.flickr.com/photos/15923063@N00

The second timeframe that a trader must consider is the

higher level time frame. This provides a big picture view. This

is usually magnified by 4x - 6x the trading time frame.

cc: krossbow - https://www.flickr.com/photos/13194817@N00

Lastly, we have the smaller timeframe which

is the execution timeframe. This timeframe is

1/4x -1/6x the trading time frame.cc: hidden side - https://www.flickr.com/photos/16608866@N00

Top Down Approach

Advantagecc: khorashad - https://www.flickr.com/photos/23833736@N03

Instead of using a Top Down approach, many

traders incorrectly apply multi time frame

analysis by using a bottom up approach.cc: eltpics - https://www.flickr.com/photos/54942754@N02

A top down approach is a much more objective way to

perform your analysis. You essentially begin with a broader

view and work your way down to the lower time scales.

cc: marcp_dmoz - https://www.flickr.com/photos/30982194@N05

Exploring the Different Time

Framescc: pasotraspaso. Jesus Solana Fine Art Photography - https://www.flickr.com/photos/65069067@N00

WEEKLY CHART

• This time frame gives a macro

view of the currency pair. It

provides a sense of how the

major market participants are

positioned.

DAILY CHART

• Plot horizontal price support

and resistance levels, supply

and demand zones, and

perform relevant trend line and

pattern analysis on the daily

240 MINUTE CHART

• Zoom down to the 240

minute to scan for high

probability potential setups.

60 MINUTE CHART• The execution time frame. Once

I have the go-ahead from my 240 minute and Daily chart, I zoom down to the 60 minute chart in order to get the best trade execution.

Use Limit Orders whenever

possible to Improve Entry Price.cc: Curtis Gregory Perry - https://www.flickr.com/photos/33124677@N00

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