Multiple Time-Frame Analysis

Multiple timeframes analysis equals using 2 chart time-frames to trade stock indices trading - a shorter one used for trading and a longer one to check Indices trend.

Since it is always good to follow the market trend, in Multiple Time Frame Analysis, the longer time-frame gives us the direction of the long-term trend.

If the long-term market direction supports the direction of the smaller chart time-frame then the probability of being profitable is greatly increased. This is because even if you make a mistake the long-term trend will eventually save you. Also if you trade with direction of the market, then mostly you will be on the winning side, this is what this analysis is all about.

Remember there's a popular saying by many Indices and stock market investors that says: "The trend is your friend' - never go against the stock indices trading market.

There are four different types of Indices traders - all these use different charts to trade as explained below.

Examples of how each type of Indices trader uses multiple Stock Indices Trading time-frames analysis strategy:

Scalpers

This group holds onto their trades for only a few minutes. The scalper never holds on to a trade for more than ten minutes. With the aim of making small amount of pips profit: 5 - 20 pips.

A Scalper using 1 minute chart wants to go long, checks 5 min chart, which looks like the one below, since 5 minute show trend is going up, then decides from this analysis it's okay to buy.

How Do I Trade Index with Multiple Timeframe Index Trading Analysis Method?

Day Traders

This group holds on to their trades for a few hours but not more than a day. With the aim of making quite a number of pips: 30 - 100 pips.

Day trader trading 15 min chart wants to go long, checks 1 hour chart, which looks like the one below, since 1 hour shows market trend is going up, then decides from this analysis it's okay to buy

Day Traders multiple time frame strategy - Multiple Chart Timeframe Analysis Strategy Guide

Swing Traders

This group holds on to their trades for a few days to a week. With the aim of making a large number of pips: 100 - 400 pips.

Swing trader using 1 hour chart wants to go short, checks 4 hour trading chart, which looks like the stock indices trading example explained and illustrated below, since 4 hour shows the trend is going down, then decides from this analysis it's okay to sell.

How Do I Trade Stock Indices with Multiple Time frame Stock Indices Trading Analysis Method?

Position traders

These are the investors that hold on to their trades for weeks or months. With the aim of making a large number of pips: 300 - 1000 pips.

Position trader using the daily trading chart wants to go short, checks weekly chart, weekly looks like one below, since weekly shows the trend is going down, then decides from this analysis it's okay to sell.

Index Multiple Chart Timeframe Index Analysis

How to Define A Stock Indices Trading Trend

Using a indices trading system has 3 indicators - Moving Average Crossover System, RSI and MACD and uses simple rules to define the trend. The rules are:

Upwards trend

Both MAs Moving Up

RSI above 50

MACD Above Centerline

Downwards Indices Trading Trend

Both MAs Moving Down

RSI below 50

MACD Below Centerline

For More explanation about this system read: How to Generate Trading Signals with a Indices Trading System.