Trading Price 3: Multiple Time Frame Analysis Flashcards
Reason for Time frame analysis
- Profit - Trade on Impulse trend 95%, Correction trend 5% 2. Decrease Risk - set stops 3. Increase Probability - find zones
What is minimum amount of time frames trader should use?
Minimum is 2, but 3 will give you a more precision based trade.
3 Time Frames
- The 1st time frame used is the HIGHER TIME FRAME, AKA The big picture 2. The 2nd timeframe is: INTERMEDIATE TIME FRAME 3. 3rd timeframe: SMALLER TIME FRAME
Purpose of Higher Time Frame
ID the Trend what is the trend direction?
Pupose of Intermediate Time Frame
ID Supply and Demand Zones
Pupose of Smaller Time Frame
OPTIONAL gives you a more precision based entry - like a #2 entry within zones
What two timeframes can the trader set up a trade?
- A trader may set up the entry, stop, and targets based upon either the intermediate or smaller time frame income trader: smaller timeframe Swing trader: intermediate timeframe- or combo of two
How do we find QUALITY S/D zones?
- Odds enhancers
How to use 2 timeframes
Higher time frame: ID TREND Intermediate Time Frame: - ID BOTH S/D Zones - S.E.T. Trade (Stop, Entry, Target)
How to use 3 timeframes
FOR INCOME TRADING Higher time frame: - ID TREND Intermediate Time Frame: - ID BOTH S/D Zones Smaller Timeframe - S.E.T. Trade (Stop, Entry, Target) - Entry to buy, Stop Loss, Target 1 and 2
How to use 3 timeframes in Hybrid Fashion
FOR SWING (GROWTH) TRADE Higher time frame: - ID TREND Intermediate Time Frame: - ID BOTH S/D Zones - Set Stop Loss, Target 1 and 2 Smaller Timeframe - Entry to buy
Hard Fixed Target
If exit all at once
Let profits run exit tactic
Example: If sell half at target, and other half run using technical stop
What kind of trader uses 2 timeframes only?
Swing Set it and forget it new trader people limited by time
What kind of trader uses 3 time frames?
Income/paycheck trader Advanced trader