Using Multiple Time Frame Analysis to Enhance Trading Success

What is Multiple Time Frame Analysis?

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.

The first time frame to consider is the trading time frame. This is where we are scanning for setups
and signals.

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.

Lastly, we have the smaller timeframe which is the execution timeframe. This timeframe is 1/4x -
1/6x the trading time frame.

Top Down Approach Advantage

Instead of using a Top Down approach, many traders incorrectly apply multi time frame analysis by
using a bottom up approach.

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.

Exploring the Different Time Frames

Weekly Chart

• This time frame gives me a macro view of the currency pair. It provides me a sense of how the major market participants are positioned.

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 Improving Entry Price.

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