Multiple Time-frame Analysis

Multiple timeframes analysis equals using 2 chart time frames to trade xauusd - a shorter one used for trading & a longer one to check the trend.

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

If the long term market direction supports the direction of the smaller time-frame then the probability of being profitable is greatly increased. This is because even if you make a mistake the long term trend will eventually save you. Also if you trade with direction of the market, then mostly you will be on the winning side, this is what this type of trading analysis is all about.

Remember there's a popular saying by many Gold and stock market traders that says: 'The trend is your best friend' - never go against the market.

There are 4 various different types of traders - all these use different charts to trade as shown below.

Examples of how each type of trader uses multiple Gold timeframes analysis trade strategy:

Scalpers

This group holds on to their trade transactions for only a couple of minutes. The scalper never holds onto a trade position for more than ten minutes. With the goal of earning small sums of pips as a profit, 5 - 20 pips.

A Scalper using 1 minute trading chart time frame wants to open long, checks 5 minute trading chart, which looks like the one below, since 5 minutes show trend is heading up, then decides from the analysis it's ok to buy.

Day Traders

This group holds onto their trades transactions for a period of a few hours but not for more than a day. With objective to make quite a number of pips: 30 - 100 pips.

Day trader trading 15 minute chart time frame wants to go long, checks 1 Hour chart, which looks like the one below, since 1 hour displays price trend is heading up, then decides from the analysis it's ok to buy

Swing Traders

This group holds on to their trade transactions for a couple of days to a week. With the main aim to make a big number of pips: 100 - 400 pips.

Swing trader using H1 chart time frame wants to open short, checks 4 hour chart, which looks like the example shown below, since 4 hour displays the trend is heading down, then decides from the analysis it's ok to sell.

Position traders

These are the investors that hold on to their trade transactions for weeks or months. With the main aim to make a big number of pips: 300 - 1000 pips.

A Position trader using daily chart time frame wants to short sell, checks the weekly chart, weekly looks like one below, since weekly highlights the trend is heading down, then decides from the analysis it's ok to sell.

How to Define A XAUUSD Trend

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

Upward trend

Both Moving Averages Moving Up

RSI Indicator above 50 Mark

MACD Above Center Line

Downwards Trend

Both Moving Averages Moving Down

RSI Indicator below 50 Mark

MACD Below Centerline

For More details about this system strategy read: How Do I Generate Signals with a System.

More Topics:

• How Do I Use Fibonacci Pullback Levels on MT4 Platform?
• Moving Average MA Analysis in FX
• How Do I Use MT5 Chandes QStick Technical Indicator?
• How to Add S and P ASX200 Index on MT5 Platform
• Learn Indices Indicators for Beginner Traders