How to Trade Multiple Timeframes and Win in Olymp Trade

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You have heard seasoned traders talk about multiple timeframe analysis, but have you searched around to find out what that really is?

Well, if your search brought you here, then you should consider yourself lucky because it is the exact subject of this post.

If you have been doubting if multiple timeframe analysis works, say no more.

I give you my word, multiple timeframe analysis can improve your entries and the ultimate outcome of your trading.

You want to be in a trade favored by a higher timeframe than your entry timeframe.

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That way, you are confident that there is a higher possibility of a win.

Makes sense, right?

Before we delve in deeper though, let’s define these terms.

What is Multiple Timeframe Analysis?

Multiple timeframe analysis is a trading technique that involves looking at trading charts from the perspective of different timeframes.

The various timeframes available on trading charts are such as:

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  • 1 Minute (M1)
  • 5 Minute (M5)
  • 15 Minute (M15)
  • 30 Minute (M30)
  • 1 Hour (H1)
  • 4 Hour (H4)
  • 1 Day (D1)
  • One Week (W1)
  • 1 Month (MN)

Now that you know the various timeframes available on trading charts, it would be easier for you to understand multiple timeframe analysis.

Multiple timeframe analysis is an act of looking at more than one of the above timeframes to make trading decisions.

Would you rather take a trade that is backed by only one of the above timeframes or one backed by almost every other timeframe on the charts?

Don’t spit it louder, I know your answer.

I know you shouted, “backed by almost all timeframes” at the top of your lungs. Hehe.

If that is what you said, then am impressed.

I can tell you have now begun getting the gist of multiple timeframe analysis.

The aim of checking multiple timeframes before any entry is to ensure a high probability of wins.

That is because an entry backed by more than one timeframe will of course stand a better chance of earning some profits than one backed by only one timeframe.

What is an Entry Timeframe?

Entry timeframe

An entry timeframe is defined as that timeframe which you usually use when making entries or taking trades.

Some traders prefer entering trades on the 1 Minute timeframe as others prefer the 5 Minute timeframe.

Others still, prefer taking trades while on the 15 Minute timeframe while others do so at a 1 Hour timeframe, and so on.

The reason behind all this? Preference.

Every trader has their own reasons for making entries or taking trades on the timeframe in which they do.

Then you ask yourself, what has an entry timeframe to do with multiple timeframe analysis?

Everything.

Remember, each candlestick in a selected timeframe is representative of the time in a timeframe. 

If you choose a 1-minute timeframe, it also means that the candlesticks will be formed in 1 minute.

And that can easily affect your winning.

How to Trade Multiple Timeframes and Win.

Now you must be wondering if you will now begin looking at all timeframes and only take the trades supported by all timeframes.

Moments, when a particular bias is supported by all the timeframes we have stipulated above, may be rare and very uncommon.

That leaves the trader confused if we say that a setup must be supported by all timeframes before they can make an entry.

I can feel the cloud of confusion in the atmosphere right now. He.

Do not fret.

I didn’t mention anything like having your setup backed by all the timeframes.

If I dare do that, I might as well have killed your whole trading career, because what I am saying is near impossible.

So what then?

How do you carry out the multiple timeframe analysis?

Which timeframes do you look at and which ones do you ignore?

Why would you look at some timeframes and then give others a wide berth?

These are some of the trading questions we will answer with this post.

In answering such questions, we shall be addressing the issue of how to trade multiple timeframes and win in Olymp Trade.

We didn’t come here to blow our accounts or load them with money and do nothing afterward. We are here to win and make some money, right?

Let us get on with it then.

How to Go About Multiple Timeframe Analysis.

There was a reason why immediately after defining multiple timeframe analysis, we went ahead to define and talk about the entry timeframe.

If you remember well, we mentioned that the entry timeframe has everything to do with multi-timeframe analysis.

We agreed that looking at all the timeframes that exist is tedious and will almost always breed confusion.

We also agree that multiple timeframe analysis is a powerful trading technique and profitable if used in the right manner.

So what is the right manner to use multiple timeframe analysis?

How do you go about multiple timeframe analysis? Let’s find out.

Here are the steps to effecting multiple timeframe analysis, trading them, and winning:

  • Establish Your Entry Timeframe.
  • Identify a Suitable Higher Timeframe.
  • Establish the Current Swing on the Higher Timeframe.
  • Revert to the Entry Timeframe.
  • Identify an Entry Signal on the Entry Timeframe.
  • Make an Entry.
  • Remember Money Management.
  1. Establishing Your Entry Timeframe.

We defined the entry timeframe as that timeframe which you usually use when making entries or taking trades.

Some traders prefer entering trades on the 1 Minute timeframe as others prefer the 5 Minute timeframe.

Others still, prefer taking trades while on the 15 Minute or the 30 Minute timeframe while others do so at the 1 Hour timeframe.

Don’t be shocked to find swing traders who prefer making entries at the H4, D1, or W1 timeframes.

So which timeframe do you prefer for entries?

You have your own reasons for choosing that timeframe and it is okay to do so. Once you have established that timeframe, you can proceed to the next step.

  1. Identifying a Suitable Higher Timeframe.

Here is where the rubber meets the rod.

It is where the significance of multi-timeframe analysis is drawn, and therefore much attention is required.

What do we mean by a suitable higher timeframe?

Is there anything like a suitable higher timeframe?

Are not all higher timeframes suitable for multi-timeframe analysis?

Good questions right there.

To begin with, a suitable higher timeframe is determined based on your entry timeframe.

In reference to the entry timeframe you prefer, not all higher timeframes will then be suitable for multi-timeframe analysis.

Only specific ones will be fit to look at, and so yes, there is something like a suitable higher timeframe.

So how the hell do you use your entry timeframe to determine a suitable higher timeframe to affect your multi-timeframe analysis?

Relax, it is quite simple as you will later find out.

Ever heard of anything known as the Factor of 4-6?

The Factor of 4-6 is what we use to determine a suitable higher timeframe for multi-timeframe trading based on your entry timeframe.

This is to say that suitable higher timeframes for the various entry timeframes will be arrived at by multiplying the entry timeframe by 4, 5, or 6.

Here are the specifications:

Entry TimeframeSuitable Higher Timeframe
1 Minute (M1)5 Minute (M5)
5 Minute (M5)30 Minute (M30)
15 Minute (M15)1 Hour (H1)
1 Hour (H1)4 Hour (H4)
4 Hour (H4)1 Day (D1)
1 Day (D1)One Week (W1)
1 Week (W1)1 Month (MN)

Suitable Higher Timeframe

  1. Establishing the Current Swing on the Higher Timeframe.

What is the behavior of the price on the higher timeframe?

Is the market rallying upwards, downwards, or consolidating?

This is what will dictate what you will go to do on your entry timeframe.

An uptrend will be depicted where the price on the higher timeframe is making higher highs and higher lows.

You know that you can never fight the trend but rather befriend it, so long positions would be most appropriate here, but not at this step.

A downtrend, on the other hand, is shown on the higher timeframe by the price making lower lows and lower highs.

Short positions would be most suitable here because the trend is downwards, but not at this step.

A consolidating or indecisive market is when the price on the higher timeframe is neither making higher highs and higher lows nor making lower lows and lower highs.

The market is simply ranging within a channel or indefinitely.

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It is dangerous to trade in an indecisive market and so you would rather keep off.

Now, you have done well to establish the general direction of the market on the higher timeframe.

But, is that really what we aim to achieve at this step?

The objective of this step reads ‘establishing the current swing on the higher timeframe’.

Therefore, you should focus more on the current swing and not the general trend.

Yes, the market might be on a general uptrend but the current swing or leg of the price which is forming is downwards and vice versa.

It is that swing or leg which is currently forming which we have an interest in.

Current swing

  1. Revert to the Entry Timeframe.

Have you been on a suitable higher timeframe and have established the current swing?

Then you have done well.

Keep the direction of the current swing in mind and then select your preferred entry timeframe, which you had been before you selected a suitable higher timeframe.

Make no mistake of going to a different lower timeframe than the one you used to establish the higher timeframe.

  1. Identify an Entry Signal on the Entry Timeframe.

Do you still have in mind the direction of the current swing which you obtained on the suitable higher timeframe?

If you don’t, you can still go to the higher timeframe and confirm, then revert back here at your entry timeframe.

Now, you will use the direction of the current swing of the price at the suitable higher timeframe to find entries corresponding to that direction on the entry timeframe.

It is not until then that you can make an entry in the direction of the current swing established at the suitable higher timeframe.

What do I mean really?

Here are the specifications:

The direction of Current Swing at Suitable Higher TimeframeEntry Signal to Look for on the Entry Timeframe
Current Swing is UpwardsBullish Signal
Current Swing is DownwardsBearish Signal
Current Swing is Not ClearNo Signal

Bearish Signal

  1. Make an Entry.

Have you established a signal on the entry timeframe corresponding to the direction of the current swing of the higher timeframe? Then it is time to take trades in accordance to the signals obtained.

Here are the specifications:

The direction of Current Swing at Suitable Higher TimeframeEntry Signal to Look for on the Entry TimeframeEntry to Make
Current Swing is UpwardsBullish SignalEnter a Buy or Long Position
Current Swing is DownwardsBearish SignalEnter a Sell or Short Position
Current Swing is Not ClearNo SignalMake No Entry

Suitable Higher Timeframe for multiple timeframe trading

  1. Remember Money Management.

The aim of this post is to establish how to trade multiple timeframes and win.

You cannot win if you ignore money management, even if you adhere to everything else we have talked about.

Did I, in any of my statements, mention that multiple timeframe analysis is fool-proof and an unbreakable strategy?

No, I didn’t, and that means that all trading strategies, including this one, suck at something and are not 100% effective.

All I said was to emphasize that money management should never be left out of the picture.

You see the Stop Loss orders you have been using before?

What about the minimum lot sizing that you have practiced since you started trading?

I know you have also been using Take Profit orders.

Continue using such for better results.

Wrapping Up.

Was this post, ‘how to trade multiple timeframes and win’ satisfactorily addressed?

Let’s talk in the comment section.

Happy Trading!


*Risk warning:

The information provided does not constitute a recommendation to carry out transactions. When using this information, you are solely responsible for your decisions and assume all risks associated with the financial result of such transactions.
 

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