A multi-timeframe analysis is a comprehensive chart-based analysis of trends in an underlying asset (stock, index, commodity, etc.) on different time frames.
A multi-timeframe analysis is a comprehensive chart-based analysis of trends in an underlying asset (stock, index, commodity, etc.) on different time frames. Ideally, these should complement each other in their information and thus deliver a better, more precise and more accurate picture of the analysis than looking at a time level alone.
Because even the biggest trend phases that last for years are fed by a large number of smaller, subordinate trend movements, the ideal goal of the multi-timeframe analysis is, on the one hand, to draw conclusions about the continued existence or the further long-term development of the underlying from the consideration of short-term time levels. At the same time, the combination of different time levels and thus different sized, sometimes opposing trend sections allows the current price events to be sorted into the larger long-term context.
Each of these time intervals or investment horizons corresponds to a simplified type of exchange participant, to whom the respective analysis is primarily aimed: The day and short-term trader can use short-term signals from the hourly chart for his trading.
Swing and position traders, as well as shorter-term investors, can gain insights on a daily chart basis with a focus on multi-day to multi-week moves. And medium- to long-term investors can get the high-level picture provided by the weekly chart for their assessments or as a technical “second opinion.”
Ideally, all time levels work together and complement each other both in the analysis and in the development of appropriate trading and investment ideas. This means that a long-term development may already be announced in the hourly or daily chart and can be traded early. Conversely, one tries to avoid overlooking far-reaching, higher-level signals and movements by focusing too much on intraday charts or daily basis.
A systematic advantage of the multi-timeframe analysis is ideally to work out signals that arise on an intraday basis and continue step by step in the higher time frames. In this way, a day trade can become a medium-term investment.
Some automated trading software like the new Tesler trading system allows you to realize your technical analysis and automatically detect trading patterns.