Multiple Time-frame Analysis

Multiple timeframes analysis equals using 2 chart timeframes to trade gold - 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 price direction of the smaller time-frame then the probability of being profitable is greatly increased. This is because even if you as a trader make a mistake the long-term trend will eventually save you. Also if you trade with the market direction of the price, then mostly you'll 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 & 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.

Example illustrations of how each type of trader uses multiple Gold timeframes analysis trading strategy:

Scalpers

This group holds on to their trades for only a couple of minutes. The scalper never holds onto a 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 chart timeframe 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 this 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 trades 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(Moving Average) Crossover System, RSI and MACD and uses simple guidelines to define the trend. The Trading Rules Are:

Upwards trend

Both MAs Moving Up

RSI above 50 Mark

MACD Above Center Line

Downward Trend

Both MAs Moving Down

RSI below 50 Mark

MACD Below Centerline

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

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