Multi-Time Frame Analysis is the Technical analysis of financial markets over different periods
Technical analysis of financial markets can be conducted over daily, weekly and monthly timelines or if one is looking to trade shorter periods one can examine the same data over daily, hourly and minute charts. The idea is to find a pattern where the trend is the same over several periods.
Technical analysis of financial markets for Short to intermediate term traders
Traders in this category are looking for ways to maximise their short term gains. The main charts of choice are the daily and hourly charts, depending on how fast the trader wants to open and close the position. Day traders will focus on hourly and even smaller time frame charts like the one minute chart. They are looking to scalp as many points as they can on any given day. Therefore, the goal here would be to get the hourly chart, the 30-minute chart and maybe the 1-minute chart to agree on the trend. When all three are trending in the same direction, the odds of success rise significantly.
Technical analysis of financial markets for Long-term traders
Technical analysis of financial markets has a different meaning for long term traders. Long term traders are usually position traders. They establish a position and are in it for long term gains. They are not looking to scalp a few points here and there. The idea is to lock in substantial gains. The ideal charts to use in this strategy would be to combine the weekly and daily charts. The overall idea is the same; if the markets are trending in the same direction on both timelines, then the odds of strongly favour the opening of an extended position and vice versa.
Technical analysis of financial markets for Very long-term traders
Very few traders fall under this category as this demands extreme discipline and patience. One has to wait for very slow long term moving charts like the monthly chart to indicate a new trend is in play. When that has occurred this trader then looks at the weekly chart to see if the indicators there are in alignment with the monthly indicators; if they are then its time to go long or short. If you are looking for an almost perfect entry point, then the optimum strategy would be to wait for the monthly, the weekly and the daily charts to trend in the same direction. Regarding Technical analysis of financial markets, this strategy yields very large rewards but as stated before you must be a very disciplined and patient trader to put this strategy into play.
Chart Sources Technical analysis of financial markets
There are many sources on the Internet that provide useful charts, and many of them are free or offer free services. Two such sources are listed below. Remember, that technical analysis is not a skill that can be mastered overnight. You did not learn to walk overnight, and you will not learn technical analysis in one day. All good things take time, so allocate time, and you will be rewarded accordingly.
Random thoughts on the Technical analysis of financial markets
If you want to take Multi-time frame Analysis to the next level, then you need to understand that emotions dominate the markets. It is the emotion that drives the market, so if you understand the sentiment that is driving the market, you will spot the trend. Mass psychology should play an integral role in any trading system. Once you have identified the trend, technical analysis becomes infinitely easier. The trend is your friend; everything else is your foe.
Crowd Psychology explains investors affinity for negativity and negative headlines; see video below
The video below will provide you with a brief introduction to Mass Psychology. Mass psychology differs from contrarian investing; contrarian investors take a position that is opposite to the masses immediately. Mass psychology states that you should wait until the masses are frothing with joy before you take an opposing position and vice v
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