Multiple Time-Frame Analysis

Multiple time-frames analysis equals using 2 chart time-frames to trade commodities trading - a shorter one used for trading & a longer one to check Commodity Trading trend.

Since it's always good to follow the trend, in Multiple Time Frame Analysis, longer timeframe gives us the direction of the long term trend.

If long term market direction supports the direction of the smaller chart timeframe then probability of being profitable is greatly increased. This is because even if you make a mistake the long term commodity trend will eventually save you. Also if you trade with direction of commodities market, then mostly you'll be on the winning side, this is what this analysis is all about.

Remember there is a popular saying by many Commodity Trading & stock market traders that says: 'The commodity trend is your friend' - never go against the commodities trading market.

There are four different types of Commodity traders - all these use different charts to trade as described below.

Examples of how each type of Commodities trader uses multiple Commodities Trading timeframes analysis strategy:

Scalpers

This group holds on to their trades for only a few minutes. Scalper never holds on to a trade for more than ten minutes. With the objective of making small amount of pips profit: 5 - 20 pips.

A Scalper using 1 min trading chart wants to go long, checks 5 min chart, which look like the one below, since 5 min show commodity trend is going up, then decides from this analysis it's ok to buy.

Day Traders

This group holds on to their trades for a few hours but not more than a day. With the objective of making quite a number of pips: 30 - 100 pips.

Day trader trading 15 minute trading chart wants to go long, checks 1 Hour chart, which looks like the one below, since 1 hour shows market commodity trend is going up, then decides from this analysis it's ok to buy

Swing Traders

This group holds on to their trades for a few days to a week. With the objective of making a large number of pips: 100 - 400 pips.

Swing trader using the 1 Hour trading chart wants to go short, checks the 4 Hour chart, which looks like the commodities trading example illustrated and shown below, since 4 hour shows the commodity trend is going down, then decides from this analysis it's ok to sell.

Position traders

These are the traders that hold on to their trades for weeks or months. With the objective of making a large number of pips: 300 - 1000 pips.

Position trader using the daily trading chart wants to short sell, checks weekly chart, weekly looks like the one below, since weekly shows the commodity trend is going down, then decides from this analysis it's ok to sell.

How to Define A Commodities Trading Trend

Using a commodity trading system has 3 indicators - Moving Average Crossover System, RSI & MACD & uses simple rules to define the trend. The rules are:

Upward trend

Both MAs Moving Up

RSI above 50

MACD Above Centerline

Downwards Commodity Trading Trend

Both MAs Moving Down

RSI below 50

MACD Below Centerline

For More explanation about this system read: How to Generate Trading Signals With a Commodity Trading System.