6. Day Trading Lesson 6: Multi Time Frame Analysis

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The sixth lesson in a series on technical analysis for active traders of the forex market, futures market, and stock market.

We should now have a good understanding of how to spot trends in the forex market, stock market, and futures market. Now lets tie everything together we have learned thus far with the final concept of this series, Multi Time frame analysis.

No matter what time frame you end up using as a trader or what time frame a particular strategy calls for, it is important always to have a big picture overview of what is happening in the market. Although there are exceptions, in general most traders will tell you that if your trade setup or analysis lines up on multiple time frames, then the odds of being correct are greatly increased.

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• fututres
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• informedtrades

[gowiemeister]

At 2:25, how do you know whether that it will continue to bea strong uptrend, or whether that small vertical line in the top right hand corner marks the start of a downtrned?

[InformedTrades]

Well since we are still above the downtrend line we can only assume that there will be demand once we reunite with the actual trend line. If not then we could see a break of the trend but until then there is no reason to assume the trend will break.

-Brendan

[TheProphiting1]

A 5 min chart would work for a scalper if the price action/volume were enough in that time frame, however, if you are a long term trader you would want to look at a longer time frame to base your investment on.

[InformedTrades]

Hey TheProphiting1, This is true. In my day trading I always look at a 5 min chart, and occasionally at a 1 min chart and at the daily chart.

For longer term trading I would suggest a 60 min chart and a daily chart or possibly a 15 min chart.

-Brendan

[lachuz]

Hi Dave, Amazing work. You mentioned below in your comments that your bias would be for going long. Since the 5 minutes and hourly charts are trending down i should be able to go short for a scalping trade correct? By the way you mentioned in an earlier video that day traders look for the daily charts and lesser time frame(1 hour, 15 minutes etc) charts. So my question is for scalping what time frame you take into account?

Thanks,

lr

[InformedTrades]

Thanks for the comment. You can always go short however I personally prefer to trade with the longer term trend even when trading shorter timeframes as I feel that this ups my chances for profits. I do not personally scalp the market however if I were going to do this I would focus on the 5 and 1 minute timeframes. Best Regards, Dave

[MrGrifut]

What do they mean when they talk about a stock is trading 3 time it multiple

[MrGrifut]

What do they mean when they talk about a stock is trading 3 time it multiple

[Nicarider182]

The trend is your friend.

[freeSCALPINGindicato]

Scalping is much easier...

[missrosetejano]

so why is it important to look at a 5 min chart?

[Giantsbran1227]

Where do you get those charts from?