Correlation / Multi Time Frame Analysis

Beginner Questions
#1

Hi,

I been through the school of trading providing on this site, also seen various videos and articles from other traders as well. My questions relate to what I am looking for in Multi Time Frame Analysis(Trend,Price,Stochastics,etc).

My setup is using 3 time frames, the 4hr, 15mn and the 1mn. I also have my SMA’s(100,200) as well on all charts.
I currently look to see if price action is below the 200SMA is so then only look for Sell opportunities and Buy if above

The problem I also have is the oscillators and the correlation(currently using 10,3,3 Slow Stoch) but the 15mn and 1mn seem out of sync ?

Here is my 15mn chart:

15mn.jpg700×440 42.4 KB

And here is my 1mn chart:

1mn.jpg700×408 43.6 KB

What slow stochastics settings should I be using, or what should I be looking out for(i.e. both coming down at same time either from overbought or oversold,heading up on 15mn channel but not overbought on the 1mn chart) ?

Any help/advice would be much appreciated

Regards

#2

Hi ThePipFather,

Yes every timeframe have their own stochastic.1HR overbought will not the same with 15Mnt overbought.
Actually how you see stoch indicator is not like that simple. but i will let you explain the basic how to see stoch indicator based on my experienced:

  • First you have to know whether it is down trend or up trend (this first thing already complicated because most of the basic trader will not know the difference between trend or retracement/correction/consolidation)

  • Second assume you already have known what the trend is, lets say it is down trend:
    During down trend there will be retracement sooner or later. during this retracement you look at the stoch. when overbought you have chances to enter the trade.
    Again this is just how you use stoch based on my experience. but i will not taking any trade just because of stoch indicator. i check fibonaci and volume also. some people using moving average and other indicator. but it is essential that you need to know how each indicator and how it works.

This is just what my experienced told me. and this is just the basic, school is really help me to learn this kind of thing. but to be honest the real world of trading need more than just school. it needs patience, experience and hard work to be able to survive and find your own way to analyze chart.

Don’t Only Follow other because they succesful, but you must understand the way this succesful people think and do.

Just a bit of advice, and maybe a question for you to work on it. Why is it 4HR, 15M ,1M? why it is not 4HR,1HR,15M? and why it is only three time frame? this is your job to figure it out and get the feeling how to set up difference time frame and the correlation depend on your trading style and preferences

Hope this is helpfull and Good Luck

#3

Hi,

Thanks for you’re reply.

  1. I am under-capitalised that’s why I use smaller time-frames otherwise I would use daily, 4hr and 1hr. Going through the School on this website it said 3 maximum, and I think that’s about right…

  2. I know all stochastics would be different on all timeframes I just thought that they would be closer matched not at different spectrums.

What settings would you recommend for a day trader on my choice of charts ?

  1. I knew about the trend direction as well.

Let me know you’re thoughts…

#4

On your point number 1, is not the case. You can adjust lot size accordingly to the percentage you want to risk per trade.which means you will still be able to use higher tf for sure .

Example…
-Your account have 3000usd invested.
-Your risk per trade is 1percent. Which amount to 30usd
-Let say you want to place a SL of 100 pips from the entry price .
-lot size calculation is needed. Hence you can use the babypips lot position calculator. To determine amount of lot size required .

Position Size Calculator: Free Online Forex Position Sizing Calculator

** undercapitalized means don’t expect to earn much money with a small amount of money invested into fx trading. Think of percentage return on weekly to monthly .
Of course one could use the high leverage. But it is a double edge sword.

#5

Hi,

Below is my opinion about your question and statement:

  1. I am under-capitalised that’s why I use smaller time-frames otherwise I would use daily, 4hr and 1hr. Going through the School on this website it said 3 maximum, and I think that’s about right…
  • Undercapitalised have nothing to do with using smaller time frame or higher time frame.
  • Is making money always the same with the text book in school? i do believe it isn’t. so use the school knowledge as the basic to acquire more experienced in real life. :slight_smile:
  1. I know all stochastics would be different on all timeframes I just thought that they would be closer matched not at different spectrums.
    -do you the formula to calculate stoch? if you know than you will know the longer the time strech the different the stoch is.:smiley:

What settings would you recommend for a day trader on my choice of charts ?

  • just a bit of advise, don’t force yourself to become day trader because you read the advantages and disadvantages in the text book, myself also doing that before, and it did not work, because i always seek way to become daytrader
    . but become a trader is become to understand people mind by reading chart so my opinion is better to become a trader that trade only when he or she see an opportunity by knowing which side the market is.
    it could become scalper, day trader, or swing trader. but the basic is you must know how to use your chart and indicator.
  1. I knew about the trend direction as well.
  • Thats awesome, for me to be understand to use the trend took me about a year.

Hope it is useful and Good Luck

#6

Back in the day, I used to trade under a strategy John Kurisko (daytraderrockstar) formulated.
It’s pretty simple and sounds like it may be of use to investigate. Search him out on the web.

Essentially, he trades faster timeframes via the emini and uses:

Support/Res
Patterns
Pivots
Moving Averages
2 Stoch’s (14,3,3 and 40,4,4)

When those all line up, you’re in business.

#7

Hi,

Thanks for you’re input, I am actually Spreadbetting rather than the conventional way of trading Forex, but I am interested in the conventional way of trading Forex if anyone knows any good UK brokers who have a good trading platform and spread fees ?

Regards

ThePipFather

#8

Just my opinion, but based on personal experience, and that of more experience traders, a newbie trading off of time frames under 1hr is a bad mistake. For my own trading I use weekly and daily for trend direction, 4hr and 1hr for entry signal. But the daily can give you some powerful entry signals alone.

Here is EURUSD daily chart and a beautiful pin bar reversal, I am kicking myself for not taking this trade. But patiently waiting for setups like this is how to make sustainable profits in forex