Merging Multiple Timeframes

To understand multiple timeframes, we have to understand how to merge multiple chart timeframes together to get to a good view of when it is time to buy, and when it is time to sell.

The goal in navigating the foreign exchange market is to find chart time frames that work together to do a proper analysis.

Commonly combined timeframes

Here are a few timeframes which are most likely to be combined together for a complete analysis:

• 1, 5, and 30 minute
• 5, 10, and 60 minute
• 30 minute, 1 hour and 4 hour
• 4-hour, 1 day, and 1 week

These four setups work well because:

1. They’re close enough together that all the information available on each timeframe is relevant to the other longer or shorter timeframes.
2. They’re far enough apart that switching between 1 view and another gives us a different perspective on the market.

Short and Long term Timeframes

Short and long term timeframes must be combined if traders are to find profitable trades. A swing trader who focuses on the 1 hour bars might look to a 15 minute chart to confirm their entry points. A day trader might focus on the 5 minute candlestick charts, but may occasionally look to the 1-hour chart to see how the “big picture” affects their intra-day buy and sell orders.

The best trades are those which are present on multiple timeframes. If the 5 minute, 10 minute, and 60 minute charts all say it’s time to buy, then a day trader might move in to make a profitable trade. But if the 5 minute chart screams sell while the 10 minute and 60 minute charts say buy, it may not make sense for the same day trader to place their short-term trade.