What is Multiple Chart Frame Analysis?


Some say, when you are a Forex trader, you sleep like a baby – you wake up every hour and cry!

Fortunately for you, HowToTrade comes to the rescue, helping you improve your chances of becoming a profitable trader and sleep like a tired adult!

Now, my question to you is…

Do you trade exclusively on a single timeframe? Or do you prefer to look at things in the bigger picture?

Either way, finding the right time frame for your trading is not an easy task. Nevermind trying to find a number of the right time frames…

But that’s what we are here for! To help you find yourself as a Forex trader and provide you with the best tools to conquer the market. 

Ready to get started on Multiple chart frame analysis?

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What is multiple time frame analysis?

Multiple time frame analysis is the process of monitoring the same currency pair on different time frames. Usually the larger time frame is used to establish a longer-term trend, while a shorter time frame is used to spot ideal entries into the market. But more on that later. 

When you use a chart, you’ll notice that there are different time frames being provided, ranging from 1 minute charts right through to 1 month charts. These are usually marked as M, H, D, W and MN. 

M” is short for “minute”, “H” is short for “hour”, “D” is short for “day”, “W” is short for “week”, and “MN” is short for “month”.

What’s the need for all these different time frames?

The reason is simply because there are different participants in the market. This means that different Forex traders can have their different views on how a pair is trading and both can be completely correct.

For example, Andrew may see that EUR/USD is on a downtrend on the 4-hour chart. However, Max trades on the 15-minute chart and sees that the pair just ranging up and down. And they could both be correct!

Let’s see what I mean by that below by taking a closer look at the same currency paid but on 3 different time frames, 4-hour, 60-minute and 15-minute time frame. 

multiple chart

Notice the 60-minute chart above. The market appears to be in a downtrend after it completed a failure swing. 

Now take a look at the 4-hour chart. We can clearly see that that only the wave is down but the trend is still up. 

The points is, if we just looked at the 60-minute chart we probably would have sold at the point where the market would recommence its uptrend.

As you can see, this poses a problem.

Trades sometimes get confused when they look at the 4-hour timeframe, see that a sell signal, then they hop on the 1-hour and see price slowly moving up.

Let’s take a look at an another example of the same currency pair but in different time frames. This time we will look at the EURUSD paid in a Monthly, Weekly and Daily time frame.

Monthly Chart View

monthly multiple chart

Weekly Chart View

weekly multiple chart

Daily Chart View

daily multiple chart

The patterns and trends look pretty different, eh?

So what are you supposed to do in these situations?

The easiest thing to do would be to flip a coin to decide whether you should buy or sell…

But we are not about the easy solutions here. We want you to make the REAL money!

And the way to do it is by knowing how to analyse and interpret multiple time frames to your advantage.

Now that I’ve got your attention, click Next to learn more about the best time frames to trade in. 

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