Take a look at the following example:

  • If you intend to enter a buy order on the H1 frame because H4 is trending up, your timeframes may not go together. Usually, the H1 frame will go in the opposite direction compared to the H4 frame.
  • If the H4 frame chart is breaking out of the sideways price range, usually the H1 frame has a very strong trend.
  • A sideways market on the daily or H4 frame, Trader can still trade with the trend on the H1 frame.

The conflict between chart daily and weekly chart on Crude Oil (crude oil) market.

As you can see, it is very difficult to have a trade order following the same trend on all timeframes. Usually, different timeframes will have a conflict between trending or sideways market periods.

On the other hand, when using the multi-timeframe method, you are required to analyze multiple charts at the same time (on the same financial product) thus complicating the process of your analysis. Many studies show that multitasking makes it difficult to be productive. We cannot do 2 things at the same time. What we are really doing is often shifting focus, you focus and solve problem A then you can solve problem B, and so on until the job is done.

The multi-timeframe analysis is important, but you need to give up the intention of waiting until the multi-timeframe trends go in the same direction to start trading. Try turning on the chart and see if the most recent market price behavior will see this problem.


For better multi-timeframe analysis, you can refer to a timeframe-shifting method.

Time frame conversion analysis method

Timeframe switching means that you get different trading signals at different stages of a trend, depending on the time frame you observe.

Convert from low timeframe to high timeframe

Use the AUDCAD chart with 3 frames from left to right, namely H1, H4, and D1, to describe how to analyze the time frame conversion.


With low timeframes like H1, the trading signal will come first (as it is fastest). We will have sell signals on AUDCAD at position number (1). When looking at the H4 chart during the entry process on the H1 chart, the H4 chart is still trading well above the 20 SMA and the reversing trend of the H1 seems to be just a pullback on the H4 chart. The price reversal on the H1 chart will be even more difficult to see on the daily chart.

This is also the reason why the signals on the H1 frame (or any lower timeframe) are more likely to lose more than the large timeframe chart.

The strength of timeframe conversion lies in the profit-loss ratio

However, this is also the time when the timeframe conversion approach really shows its strength: if the sell order on the H1 chart is successful and the price falls, you will have an earlier entry point. H4 chart (position 2), your profit will also be higher now when H4 continues to decline. And if H4 still has the ability to decline further, your profits will increase when the chart daily falls (position no.3). An earlier entry point will easily turn the initial expected profit-loss ratio 2: 1 (or 2R) to suddenly 10: 1 (or 10R). Super profit.

Obviously, the risk on the H1 frame is always higher, but Trading always has risks. If you know how to choose risk wisely and confidently enter trades with a high probability of winning, trade on a multi-timeframe method (or, to be exact, time frame conversion) now. help you be more successful and have huge profits.


Conclude

You see, the multi-timeframes analysis doesn't always look as good as Traders expect. As long as you are still using multiple timeframes in a way that you wait for the frames to follow the same trend, you will have to wait a long time for a good entry point.

What you should do is choose a major trading timeframe and make your trading decisions within that timeframe, whether you are managing orders or looking for an exit point. Shifting to a different timeframe in search of additional information for analysis sometimes only complicates the problem and makes you go wrong because it's not at the heart of the trading system you use.

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