Analysis of multiple timeframes

An indispensable condition for profitable trading on the market is a competent analysis of the market situation and the ability of a trader to predict further price movement with the highest quality. To accomplish these tasks, there are many different methods and tools that a trader must be able to use. Today we will talk about one of them - the analysis of several timeframes.... It is an important component of successful trading. Many novice traders prefer to trade on small time frames. In most cases, they choose the hourly chart. At the same time, in the process of market analysis, traders are not at all interested in what is happening on the older TFs, which, of course, is a mistake. Assessing the situation on different timeframes allows you to filter out false signals, reduce risks, increase trading efficiency, and therefore improve its results.

How to analyze the market situation

Analysis of several timeframes involves comparing the current market situation on a working TF and an older time interval. It should be understood that the older TF is necessary to determine the global trend. A shorter time period is used to find the optimal points for opening trading positions. The procedure is as follows. Let's say we are trading on an hourly chart. Open charts H4 or D1. We look at the prevailing trend in the market (upward, downward). If, for example, there is a downtrend in the market, then on the hourly chart we look for an entry point for a sell order. We act in a similar way to open a buy deal. It is recommended to close orders when signs of weakening or the end of an existing trend appear on the older TF.

On large timeframes, we can observe long-term trends, which are accompanied by price pullbacks. They can also be used to make money. In this case, three TFs are required. For example, hourly, 4-hour and daily. Determine the direction of the global trend using the daily chart. On H4, we track the beginning of rollbacks, and on the hourly we look for market entry points.

How to use multiple TFs

The MT4 trading terminal allows you to open several timeframes at once and arrange windows as it is convenient for the trader. But you can do it differently. To do this, you need to download and install the appropriate indicators that will facilitate trading on several timeframes. I have already talked about one of such indicators. The mini charts of the higher timeframes are located on the right side of the working chart, which allows you to constantly monitor the market situation in full. Analyzing multiple timeframes , of course, requires some skill. You can use a demo account for this.