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Multi time frame analysis - generally refers to trading with three time frames, is an analytical concept in trading which proves to be quite powerful when utilized properly.

Ideally, you will choose the main time frame you are interested in, and then choose a time frame above and below it to complement the main time frame. As such, you would be using the long-term chart to define the trend, the intermediate-term chart to provide the trading signal and the short-term chart to refine the entry and exit.

Trading with three time frames is an extremely effective and flexible way which can be applied to the analysis of long-term, intermediate-term and short-term trends.

The best three time frames combination

● Spotting Support & Resistance - Support & Resistance is key for the higher time frames.

● Identifying the trend and patterns - The middle time frames are the best for viewing trends, momentum, corrections, and patterns in general.

● Searching for entries & exits - The lowest time frames are the best trigger chart, and are useful for trading purposes. It is the best for finding the entry, and also for taking a trade setup.

1. Determine main trend

By looking at the long-term time frame, the dominant trend is established - this provides the“Bigger Picture” view.

For example, on the daily chart, XAUUSD is trading above the 200 SMA which tells you that the main trend is UP.