using multiple time frame analysis to enhance trading success
TRANSCRIPT
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Using Multiple Time Frame Analysis to Enhance Trading
Success
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What is Multiple Time Frame
Analysis?cc: LendingMemo - https://www.flickr.com/photos/92802060@N06
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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.
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Segment your analysis into three distinct time
horizons, the trading time frame, the bigger picture
time frame, and the execution time frame.cc: Leo Reynolds - https://www.flickr.com/photos/49968232@N00
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The first time frame to consider is the trading
time frame. This is where we are scanning for
setups and signals.cc: CarbonNYC [in SF!] - https://www.flickr.com/photos/15923063@N00
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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.
cc: krossbow - https://www.flickr.com/photos/13194817@N00
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Lastly, we have the smaller timeframe which
is the execution timeframe. This timeframe is
1/4x -1/6x the trading time frame.cc: hidden side - https://www.flickr.com/photos/16608866@N00
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Top Down Approach
Advantagecc: khorashad - https://www.flickr.com/photos/23833736@N03
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Instead of using a Top Down approach, many
traders incorrectly apply multi time frame
analysis by using a bottom up approach.cc: eltpics - https://www.flickr.com/photos/54942754@N02
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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.
cc: marcp_dmoz - https://www.flickr.com/photos/30982194@N05
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Exploring the Different Time
Framescc: pasotraspaso. Jesus Solana Fine Art Photography - https://www.flickr.com/photos/65069067@N00
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WEEKLY CHART
• This time frame gives a macro
view of the currency pair. It
provides a sense of how the
major market participants are
positioned.
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DAILY CHART
• Plot horizontal price support
and resistance levels, supply
and demand zones, and
perform relevant trend line and
pattern analysis on the daily
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240 MINUTE CHART
• Zoom down to the 240
minute to scan for high
probability potential setups.
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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.
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Use Limit Orders whenever
possible to Improve Entry Price.cc: Curtis Gregory Perry - https://www.flickr.com/photos/33124677@N00
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Check Out the “IN DEPTH”
Blog Post on this Lesson