the science behind timeframes + correct timeframe sequencing

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timeframes are the unit of time in which trading activity/session takes place.

timeframes are an essential tool to traders/investors because there is a direct association between the right trading style and timeframe of choice for each individual trader depending on what works or does not for them.

timeframes are often structured in forms of minutes, hours, days, weeks and months and in some cases seconds.

there are 4 main trading style : scalping, day trading, swing/position trading, this might not be the topic of discussion but like i earlier mentioned there is a mutual correlation between trading style and timeframe.

1.SCALPERS(scalping) - these type of traders capitalize of small market movements by buying/selling in large volumes, holding those positions for a short period on time. the ideal timeframes for scalpers is 1minute to 15minutes.

2.INTRA DAY - these traders have a short-term approach to the market, buying/selling financial assets not more than 24hours/within a full trading day. their ideal timeframes are 4 hours down to 15 minutes timeframes.

3.SWING/POSITION - these traders capitalize on long-term price movements and macro trends holding positions from a couple days to a few months. their ideal timeframe range from 4hours to monthly timeframe

it also important to note that the timeframe a traders depends on how efficiently they work and other factors like, patience levels, discipline, risk management strategy and lifestyle.

MULTIPLE TIMEFRAME ANALYSIS

most traders use this science behind timeframes also called "top-down analysis" to gain a broad understanding when studying price charts.

this involves using several different time periods at the same time to form a bias when analyzing charts. similar to taking a big complex task and cutting it into smaller simpler activities still without losing sight of the bigger task.

large timeframe(complex) -> small timeframe(simple) = trade bias.

to use multiple timeframe analysis you need 3 different timeframes with the next timeframe being 4/3 times smaller than the one before it.

the first timeframe is the trend timeframe is used to identify the long term trend, the second timeframe is used to identify significant price levels, identify market structure, chart patterns and the last timeframe is the entry timeframe


scalping sequence = 15MINUTE -> 5MINUTE -> 1MINUTE
intraday sequence = 4HRS -> 1HRS -> 15MINUTE
swing/position sequence = 4HRS -> DAILY -> WEEKLY + MONTHLY.

i hope this information helps/improves your trading in a positive way.

put together by Pako Phutietsile ( currencynerd )






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another key element about timeframes that I think you guys should know it that price is fractal so the same price action and market structure happens on all timeframes.
Beyond Technical AnalysiscurrencynerdForextimeframe

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