Multiple Time Frame Analysis

Multiple Time Frame Analysis

By definition, multiple time frame analysis (MTF) is the process of monitoring the same currency pair under different time frames.

Usually, traders use at least two different time frames to align both trend, momentum, and direction of the currency pair.

In trading supply and demand, we are using three different time frames:

-Higher Time Frame (HTF),

-Intermediate Time Frame (ITF),

-Lower Time Frame (LTF).

Multiple Time Frame Analysis

The higher time frame will allow us to determine the curve and to see if the current price is near the higher time frame supply or demand zone. The intermediate time frame will be used to determine the prevailing trend.

Finally, the lower time frame is where we execute and manage our trades.

The Higher Time Frames

When using multiple time frame analysis, it is advisable to start with the higher time frame first.

The higher time frame is used to identify the location of the current price on the curve. This will prevent the trader from selling at demand and buying at supply.

The Intermediate Time Frames

The next step is to analyze the intermediate time frame to identify the prevailing trend. These intermediate time frames are the best for determining trends, momentum, corrections, and so on. The main purpose is to measure whether there is a trend, impulsive or corrective price action. For day traders, this could be a 1-hour or 4-hour chart.

This frame is important because it stands between the higher and the lower time frames. Often, traders use it to monitor open trades and decide for how long they will keep their trades open.

The Lower Time Frames