How to trade based on a Multi-Timeframe Analysis?
Good morning, traders! Today we will do an explanatory post on how a Multi-Timeframe Analysis (Weekly-Daily-4H) can be used to take a trade. The benefit of this is that we will be trading taking into account the short, medium, and long-term behavior of the price, which gives us a higher success rate. Many times, we take a trade focusing only on one timeframe, and we are missing relevant information of higher temporalities, such as areas that we are not seeing.
Let's see how it would look in practice:
🔸The first thing is to start with the chart with the higher temporality, in this case, the Weekly:
- We see here that the price is in a range and bouncing in the support zone where a strong bullish momentum was previously generated. This gives us a first bullish hint.
🔸Then, in the Daily chart (published), we see that the price bounces off the previously marked zone and breaks the downtrend channel. This is the second bullish sign.
- In addition, in this chart, we proceed to mark the potential targets of the movement.
🔸Finally, in the 4H chart is where we will look for our entry into the market:
- After the break of the bearish channel, the price begins a corrective process at the edge of the trend line. When the breakout of this structure happens, the optimal thing is to place an income above the last lower high of the structure to avoid potential fakeouts.
Let's see how it would look in practice:
🔸The first thing is to start with the chart with the higher temporality, in this case, the Weekly:
- We see here that the price is in a range and bouncing in the support zone where a strong bullish momentum was previously generated. This gives us a first bullish hint.
🔸Then, in the Daily chart (published), we see that the price bounces off the previously marked zone and breaks the downtrend channel. This is the second bullish sign.
- In addition, in this chart, we proceed to mark the potential targets of the movement.
🔸Finally, in the 4H chart is where we will look for our entry into the market:
- After the break of the bearish channel, the price begins a corrective process at the edge of the trend line. When the breakout of this structure happens, the optimal thing is to place an income above the last lower high of the structure to avoid potential fakeouts.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.