Multiple Timeframe Analysis in BTCUSD Trading

Multiple timeframes analysis equals using 2 chart time frames to trade BTC/USD Crypto - a shorter chart time frame used for trading and a longer chart time frame to check the Bitcoin price trend.

Because it is usually a good idea to follow what the market is doing, using Multiple Timeframe Analysis means the longer chart timeframe tells us which way the Bitcoin price is going over time.

When the big trend matches your short chart direction, wins come easier in this setup. A wrong entry might still work out thanks to the overall trend. Trade with the market flow, and most deals succeed. That's the point of checking multiple time frames.

Remember there a popular saying by many traders and investors that says; "The trend is your best friend' - never go contra the market trend. It means that along the direction of the trend is what will consistently help you as a trader as a trader to continue making profit when trading the online Bitcoin Crypto Currency market. There are four different types of Bitcoin traders - all these traders use different chart time frames to trade as illustrated below.

Examples Show How Bitcoin Traders Use Multiple Timeframes Strategy

Scalpers

This group of traders, known as scalpers, tends to hold their trades for just a few minutes, seldom exceeding 10 minutes per trade, aiming for small profits between $30 and $50.

A short-term trader using a 1-minute chart wants to buy, so they check the 5-minute BTCUSD chart, which looks like the one shown below. Since the 5-minute chart suggests the price is rising, the trader decides it's a good time to purchase BTCUSD based on this analysis.

Bitcoin Multiple Timeframe Analysis in Bitcoin Price Charts Trading

Scalper Bitcoin Chart Time frame - 5 Minute BTCUSD Chart

Day Traders

This cohort of Bitcoin traders typically keeps their positions open for several hours, though rarely exceeding a full day, aiming to secure profits ranging from $50 up to $200 per executed trade.

A day trader eyes the 15-minute BTC/USD chart for a long entry. They check the 1-hour chart below. It shows an uptrend, so buying Bitcoin makes sense.

Bitcoin Multi-Timeframe Chart Analysis - Trade Bitcoin Across Multiple Timeframes

Day Trader Bitcoin Chart Time frame - 1 Hour BTCUSD Chart

Swing Traders

This group of Bitcoin traders holds on to their trades for a couple of a few days to a week. With the objective of making a large number of points in profit, between $200 and $1,000 in profit.

Swing trader using 1 H Bitcoin chart wants to go long, checks the 4 H chart, that resembles the example laid-out below, since 4 hour chart shows the trend is heading up, then decides from this analysis it is okay to buy Bitcoin.

Analyze Bitcoin with Multiple Timeframes - Multi-Timeframe Bitcoin Chart Review

Swing Trader Bitcoin Chart Time frame - 4 Hour BTCUSD Chart

Position BTCUSD CryptoCurrency traders

These are the traders that hold on to their Bitcoin trades for weeks or months. With the objective of making a large number of points in profit of between $1,000 and $2000 per trade.

A position trader on daily bitcoin charts eyes a long trade. They check the weekly view, which shows an uptrend like the one below. This green-lights the BTCUSD buy.

Examples and Explanations of Multi-Timeframe Analysis applied to Bitcoin Price Charts

Position Trader Bitcoin Chart Time frame - Weekly BTCUSD Chart

How to Define A BTCUSD Trend

As a novice trader commencing Bitcoin trading, understanding trend definition is essential. You can ascertain the trend utilizing a Bitcoin methodology incorporating Three technical indicators: the Moving Average (MA) Crossover System, RSI, and MACD, alongside simple trading guidelines for trend identification. The Trading Rules are as follows:

Upward trend

Both MAs are Moving Upwards
RSI is above 50
MACD above Center Line

Down-ward BTC/USD Crypto Trend

Both MAs are Moving Downwards
RSI is below 50
MACD below Centerline

For a more in-depth comprehension of how to ascertain price trends and apply Bitcoin trading systems, refer to the article on signal generation via a Bitcoin system, available on this website.

Dive into extra courses and guides.

Trade Bitcoin Trading