How to Use Multiple Time Frame Analysis to Find Better Entry and Exit Points

We now know Multiple time frame analysis as a process for reviewing different chart time frames of the same crypto to find strong trends. So we aren‘t about to break out into song like the Glee cast here at WikiFX, rather we’ve got our version of a mash-up, which we like to call the “Time Frame Mash-up”.

When we say time frame mash up, we simply means mixing or using multiple time frames instead of one. This is where multiple time frame analysis comes into play in forex. This is where you will be taught how to not only lock in on your preferred trading time frame but zoom in and out of charts so that you can knock a winner out of the park.

Are you set for the class？ Are You sure you can chop this？ Youve basically got a semester left. And you will not like to quit now, do you？

We Didnt think so actually!

First of all, take a wide look at whats happening. But never try to get your face closer to the market, but push yourself further away.

You need to recall that, a trend on a longer time frame has got more time to develop, which means that it will take a bigger market move for the pair to change course. Also, support and resistance levels are more important on longer time frames.

Begin by selecting your desired time frame and then go up to the next higher time frame. There you can make a clear plan decision to go long or short based on whether the market is ranging or trending. Then You would return to your preferred time frame (or even below!) to make cleaver decisions about where to enter and exit by placing stop and profit target.

So you just know, this is probably one of the best uses of multiple time frame analysis you can expand in to help you find better entry and exit points. By adding the dimension of time to your analysis, you can obtain an edge over the other tunnel vision traders who trade off on only one time frame. Did you already obtain that？ Well, even if you didn‘t, no worries!, We’re going to pass through an example now to help make things a little clearer and understandable.

How to Perform Multiple Time Frame Analysis

Assuming that Cinderella, who gets worried all day cleaning up after her evil stepsisters, decides that she wants to trade forex. And luckily for him , she started practice Demo trade, After some demo trading, she realizes that she likes trading the EUR/USD pair the most, and feels most comfortable looking at the 1-hour chart.

She thinks that the 15-minute charts are too fast while the 4-hour take too long – after all, she needs her beauty sleep. The first thing that Cinderella does is move up to check out the 4-hour chart of EUR/USD. This will assist her to determine the overall trend.

She observed that the pair is clearly in an uptrend.

This signals to Cinderella that she should only concentrate to Get buy signals. Above all, the trend is her friend, right？ She doesnt want to get trapped in the wrong direction and lose her slipper. Now, she takes a look back to her preferred time frame, the 1-hour chart, to help her point an entry point. She also decides to crash on the Stochastic indicator.

At one point she goes back down to the 1-hour chart, Cinderella observed that a doji candlestick has formed and the Stochastic has just crossed over out of oversold conditions!. But Cinderella still isnt pretty sure…. she wants to ensures has a really good entry point, so she scales down to the 15-minute chart to help her find an even greater entry and to give her more confirmation.

And now Cinderella is concentrating her eyes on the 15-minute chart, and she observed that the trend line looks to be holding pretty strongly. Not only that, but Stochastic is showing oversold conditions on the 15-minute time frame as well!, She pointed that this could be a good time to enter and buy.

As it turns out, the uptrend continues, and EUR/USD continues to rise up the charts. Cinderella would have entered just above 1.2800 and if she had kept the trade open for a set of weeks, she would have made 400 pips. She could have bought another pair of glass slippers. There is clearly a limit to how many time frames you can study. You dont want a screen full of charts telling you different things.

Therefore advisably Use at least TWO, but not more than THREE time frames.

Adding more will just puzzle the geewillikers out of you and youll suffer from analysis paralysis, then proceed to go crazy. But Is there a wrong way to do multiple time frame analysis, you ask？

Some of our forex friends have been nice enough to give their two pips on this matter through this forum thread on multiple time frame analysis. At the end of the day, it really is all about determining what works best for you and fits your personality.