How to be a Multiple Time Frame Trader?
How to be a Multiple Time Frame Trader?
The usage of time frames to trade varies from trader to trader but most importantly a trader should be comfortable and proficient in using his/her favorite time frame to trade. The selection of time frame also reflects the trading style of a trader.
More often than not a novice trader will just stick to one particular time frame to look at for a start. As a trader grows more confident in looking at a single timeframe, he needs to get a broader view of the market and that is where multiple time frame is needed to provide that view.
As a guide in order to get started, three timeframes are preferably to be set up with long, medium and short term frames. Normally a long term time frame will at least three times the medium time frame and the shorter will be three times smaller.
For example if I am comfortable with a medium time frame of 15mins, my smaller time frame will be 5 mins and my larger time frame will be one hour.
A medium time frame should be chosen as the main time frame to decide whether a trader should trade and the larger time frame to observe the overall trend in the market and identification of main support and resistant lines. The smaller time frame is to pin point the precise entry and possibly an exit too though a medium time frame could do the job for exit purposes.
Every time frame has an effect on every other time frame and by constantly using multiple time frame analysis, you are able to improve your success as a trader. What you constantly need to look out for is whether there is agreement between as many time frames on the market direction you are looking for. The higher the number of agreements the higher chance of getting your trade profitable.
That being said, due to my own experiences these are just some guidelines for you to follow. What you need is to combine fundamental and technical analysis or whichever you are comfortable with and to practice as much as possible to get a hang of trading with multiple time frame.
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