Is this a wrong way to do Multiple time frame analysis?

Hi i’ve been day trading for a while. But beacuse of college i can’t stay in fornt of the monitor as much as i whould like. And i’ve decided to start making trades that last longer (week maximum). In day trading i’ve been using the 1min chart to open positions , the 5min to manage the trade and 15min to look for trading setups. In the longer time frame i was thinking on using the 1min chart to open positions the 1hour to manage the trade and the 1day to find setups. What do you guys think? Is using this time frames ok or should i use diferent ones? I whould like to keep using the 1min just because i’m more confortable with it :slight_smile:

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to be honest, the only way to find out is to test it dude.

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What you can do is use one timeframe for the looking at and finding the trade setup. For example let us assume you use the 1 hour charts to find a trade setup. Then you go down to a lower timeframe to look for an entry signal. If you go down too fast to say the 1 minutes, then the market gyrations and up and down of the 1 minute chart is generally wayy too fast.

If you think about it a 1minute chart has 60 bars in order to form a 1hr bar. A lot can happen in 60 bars. The market can shake you out and put you on an emotional roller coaster.

The better way is to go down a timeframe, but not drop too low. So lets say you look at the 1 hour charts for trade setup. Do not go lower than 5 minute charts. I would prefer 15 minute charts. But in the end it is your call.

Just make sure you are not trading too fast of a timeframe, as the market can go up and down and fake you out with all those really fast price bars.

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The general rule of thumb is X4 or X6. That is to say look to 4X a longer and shorter a TF than your trading. So for 1h you’d be keeping an eye on both the 15m and 4h. I trade the daily but look to 4h and weekly.

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I agree with the “test it dude” comment. I’ve been told that below the 15M time frame you are probably trading against very sophisticated computer programs and they are hard to beat consistently. I guess maybe some people can do that, but they must be exceptional. For most of us mortals, probably anything below 15M is not ever going to produce consistent results. I’ve also been told if you are using a three time frame system, each should be 4 to 6 times the other, like using the 4H for setups, the 1H for agreement and monitoring and the 15M for timing the entry, or whatever.

I look at all three charts as different views of the same price action. For instance, if you look closely at the patterns in the last quarter of the 4H chart, you see those patterns, just blown up by a factor of 4, represent the whole 1H chart. And, if you look at the patterns of the last 1/4 of the 1H chart, you see those same patterns blown up by a factor of 4 represent the whole 15M chart. You might have to squint a bit to see it, LOL.

Be careful of the error I made trading trends early on though. Since I was using indicators with lots of lag time, I always entered just as the trend was ending and got whipsawed, except in the rare case where the trend resumed in my direction and continued. I’d do really well then, but not well enough to overcome the whipsaw losses. Mostly though, I just bought near the top and sold near the bottom, missing most of the best part of the trends and consistently losing. That’s just the opposite of a winning trend trade.

For me now, it’s better to be patient and wait for a trend to reverse, which may take hours or days, and miss the beginning of of the new trend to make sure price has confirmed the reversal, and it’s not just a small retracement against a longer trend. How long you wait depends on the time frame and your own style, but say if a good trend lasts 40 candles, missing the first and last 10 candles and trading the middle 20 to try to minimize whipsaw losses is one method. So I try to get the middle of the move, exiting before the trend is complete, to avoid the whipsaw on either end of the trend. I guess I look at it like all trends begin and end with a whipsaw, and my job as a trader is to trade between those 2 whipsaws, but to never get caught in them. Impatience causes me to get in too early and get whipsawed on the entry. Greed causes me to stay in too long and get whipsawed at the end. It’s better for me to miss out on the very beginning or the very end of a trend than to take a chance of being caught in the whipsaw at the beginning or end. Does any of that make any sense at all? If not, just ignore it. LOL, anyway, it’s simple, but not easy.

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It is quite important to know how to analyze market as there are some right way to analyze the Forex markets using multiple time frames and others are wrong. If in any case you use the wrong one it will affect your account either by increasing or losing it.

Hi CrazyGril… after ur intial whipsaws …what indicators did you prefer that helped u to get in in the middle and get out before a whip saw ?

Thanks a lot for the comments ! Very helpful !

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30 minutes for intraday trading and 4 hr and daily for swing trading. That’s how I do it.

“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”
-Mark Twain.

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The Gap between the H1 and M1 looks too big to me. I can understand that you want to use the M1 for your trade entry, but you said that you can’t watch the screens all the time due to college. So what do you do when a trade setup is due but you have to go to school? Skip the trade because you can’t watch the screen?

I would advise to go only one or two TFs lower to find your trade setup and not to micro-manage your trade-entry. Meaning Trade-set-up on H1, entry on M5 and placing SL using your H1.

In short, when you can’t watch the screen all the time, don’t use the M1. M5 is nice too, with less noise. It is not a question whether you like it or feel comfortable with, but what is doable in your situation.

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I’d echo that - personally the lowest I go is 5 minute, that’s where I execute the majority of my Intraday entries, with reference always to the Hourly and Daily for bias and cycle.

I’d add, though, that OP has not logged in for almost a year and CrazyGril for nearly two, so while this thread might be of general use, it is too late for those two, I fear!

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They may still be in college and strugling to combine it with their trading…:slight_smile: The email that notifies them about our responses will safe his and her trading career and they will be grateful for it for the rest of their lives.

Or they’re chilling on some yacht now, laughing at failed traders. LOL

“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”
-Mark Twain.

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This is the first time I knew a trader use M15 as setup chart then entry on M1 and M5… M15 already consists a lot of noise and I don’t see anything in M1 chart… the price just fluctuate like mad… if you are trading with bigger lot size… you won’t do that way.

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Im a newbie and have nearly finnished the school of philology.
I trade using 3 time frames as recommended on the baby pips school
they are the following:

4h = first thing when i wake up to spot overall trends. major resistance / support levels
30m = to plan my trades based on those trends and support / resistance levels spotted on the 4 hour chart
15m = to set up exact entry / exit points / stop loss points

i enjoy this time frame cause its at a comfortable speed where i can still see whats happening and have enough time to make decisions.

everyone has different time frames they prefer. it all depends on your personality (if u want it to move faster or slower) and also the length of your trades (a few minutes or a few hours or a few days … even weeks)

Check out the lesson in Grade 13 in the school section of this site… it helped me heaps

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It’s usually advantageous to do a TOP DOWN analysis. This means you start at the highest time frame and work your way down. That way you know where the key S/R are as well as where price may be headed in the bigger picture. What charts you use to enter on a lower time frame doesn’t matter as long as you have the set up stalked. I would say 99% of experienced traders stay away from the 1 min chart and trade something like 1 hour to 4 hour charts. (Just my guess though)

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Doing multiple time frame analysis is not wrong at all… It is good for more perfect shots… Depends how long you want to keep open your trade.

For intraday, I do analysis of price movement and trend on all M5, M15 and M30 charts. I do entry on M5 and chart setup on M5 or M15…

Hey R,

Is it still valid if I use 1hr for my main tf but look to the daily for the overall trend and 15min for my entry/exit points? I find the 4hr less of a reliable tf for overall trend compared to daily.

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If you have found it works for you then that’s fine. However, the general rule is 4X or 6X. The idea is you don’t get locked into tunnel vision on one time frame. The problem as I see it with your main 1h TF is your looking to the daily (24, 1h bars in a daily). 15m is on track if looking to the 1h though. Why not look to the 15m, 1h, 4h and daily? Couldn’t hurt?

EDIT: What’s your type of trading? As your looking to the daily for trend. Then perhaps its simply in order to take trades with the daily momentum but short term in and outs? If not, I’d be interested to learn. :slight_smile: Before you reveal all! :smiley: I’ll state why I asked. I’ve been trading a long while and tried out pretty much every TF and strat. Reason I look to 4h, daily and weekly is simple. I look to average 250 pips a week. I find 1-3 trades a week on the longer TF’s will average out to around that. So that begs the question, why stay glued to the monitors for 20 pips here and there? Also it seems insignificant but consider the spread everytime you enter a short term trade? 10 trades, say 30 pips. 50, 150 pips! It all adds up! 1-3 trades a week at most and its 3-9 pips.

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Great advice R! Couldn’t have picked a better forum colleague/trader to ask the question that’s been bothering me for days now. Hmm. I understand your point about the long-term style of trading. Sadly, I lack the zen and patience you and other swing/position traders have. Don’t get me wrong though, scalping isn’t my thing either. I’d like to think of myself as a medium/intraday trader. I prefer to open 2-3 trades and close them all at the end of the trading day. Also, my chosen trading system is the “Cowabunga” trading system, which was designed by FX team’s pipsurfer, so it is more tweaked towards shorter time frames.

I will take your wisdom and consider looking at both 4h and daily time frames. After all it’s only a few mouse clicks away right hehe. Thanks and happy trading sir!

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I am using a price action system. I check the support, resistance zones from 4hr and 1hr graph and enter a trade when I get reversal signal on 15 or 5 min chart.