Using Multiple Time Frames to find Trend

Multiple Timeframe Analysis (Swing Trading)

In order to get success in the financial Market by using the technical Analysis- we must know about the Multiple Timeframe Analysis. Without skill of Multiple Timeframe, it is almost impossible to odd of success. Basically, lots of youtube videos, blogs and books about the multiple Timeframe Analysis may or may not help.  For multiple timeframe Analysis three things must know i.e

1.       Longer time Frame – for Direction

2.       Intermediate Time Frame- for Decision (Buy or Sell)

3.       Smaller Timeframe – Entry and Exit (execute)

   

 Weekly or Monthly – Higher Timeframes give us overall Market Direction either trending up or trending down or ranging. This timeframe will help to find a major support, Resistance and Trend line

Daily– These Time frame help us to make a decision for Buy/Sell or Wait. It might give us Minor Support and Resistance, Trend line. Indicators like 50 SMA can help us to know the recent direction. If Price is above 50 SMA then trend up. If price is below 50 SMA then trend down. Price Action for long is higher high, higher low and for short is lower low and lower high

4 Hour or 1 hour – once you are happy with the above timeframe and confirmed either up or down (Long or short) then you can execute the decision from smaller time frame. Here you can decide how you would like to enter the market like counter Trend break out, narrow channel break out, flag, pennant break out etc

Does it Exit in Real World? – EURNZD (Weekly – for Direction)

 

Blue Trend line – up (Recent)

Red Trend line – Down(before)

H= High, L= Low, HH= Higher High and HL= Higher Low

(Red)trend line break out and form Higher high and higher low means it is in buy zone area

Daily for Decision (BUY/Sell or Wait)

 

This chart is Waiting for Confirmation from Daily time frame for the buy signal as we have got buy signal from Weekly chart. Daily time frame is not giving clear signal so we must have to wait for buying. As price action is not forming higher high and higher low (which is up trend price action – buying pushing up scenario) – decision is wait – let see next picture

Daily for Decision (BUY) 

  As it has established higher high and higher Low and tend line break out – meaning now in buy zone and confirmed buy signal. Even Moving average 50 SMA is below the price. Decision is BUY

4 hour execute – Buy

Finally we are in the part of making money. As you can clearly see that flag, pennant and counter Trend has been broken from left to right after moving average is below 50 SMA and 200 SMA. It is your choice which methodology you will follow but all of them will work at this point.

990 Pips moved up

Price has been moved more than 900 pips up from the counter trend break out.