Multi-Timeframe Analysis uses different charts for the same financial instrument across different periods of time to give the trader a more thorough understanding of how the market behaves. By looking at multiple timeframes (i.e. weekly, daily and intraday), the trader takes into account various indicators and levels to identify the trend direction and the most probable set-ups for that timeframe.

Using MTFA also provides confirmation of trades by helping to avoid false signals and allowing traders to trade with the main trend.

Why Multi Time Frame Analysis Is Important

The majority of traders lose money by only looking at short-term price movements. However, by using Multi Time Frame Analysis, traders can easily:

• Establish the primary market trend
• Identify high probability trade entries
• Lessen the chance of false breakouts and noise
• Increase risk-to-reward ratios
• Increase confidence and discipline

Thus, Multi Time Frame Analysis (MTFA) is taught at NXT Institutions, the leading forex trading school in Malappuram.

How to Apply Multi Time Frame Analysis Effectively

1.Examine the Higher Time Frame – Market Direction

To begin with, look at a higher time frame, such as a weekly or daily chart. This gives you a general feel for the main trend of the market (bullish, bearish, sideways).

Rule: Only enter trades in the direction of the higher time frame’s main trend.

2.Examine the Medium Time Frame – Trade Setup

After getting a feel for the market direction on higher time frames, you should look at a medium time frame (4-Hour or 1-Hour) to identify support and resistance levels, chart patterns, and trend pullbacks.

At this stage, you should narrow down your trade idea and ensure it aligns with the overall trend you identified on higher time frames.

3.Examine the Lower Time Frame – Entry & Exit

Finally, use a lower time frame such as 15-minute or 5-minute charts to fine-tune your entry, stop-loss, and target levels.

Lower time frames help in:

• Precise entries
• Better stop placement
• Improved risk management

Example of Multi Time Frame Analysis

• Uptrend respected on the Daily Timeframe
• Retracement up to Support on the 1hr Timeframe
• Bullish Candle closes on the 15min Timeframe

Having all these Timeframes point to the same direction is a high probability set-up.

Common Mistakes to Avoid

• Too Many Timeframes
• Trading Against the Direction Of The Higher Timeframe
• Over Analyzing Charts
• Ignoring Risk Management

At NXT Institutions – the Leading Trading Institute in Malappuram, we train our students to make Multi-Timeframe-Forex Analysis simple and to apply it in the real market.

The Benefits of MTFA for Forex Traders

Forex Markets are continuously changing. By using MTFA a forex trader can:

• Follow the Money Flow from the Institutions
• Prevent getting involved in ‘Fake-Breakout’ situations
• To Improve Your Timing When Placing A Trade
• To Continue To Have A High Level of Emotion Control

This is why MTFA is one of our Focus areas here at the Leading Forex Trading Institute in Malappuram.