Many trading approaches are built on multiple time frame analysis. However, in real life trading, multiple time frames can be more of a detriment than a help. It is common for one time frame to be giving a buy signal, while another time frame is giving a sell signal. By the time one time frame starts to get into synch with the other, they flip over and get out of synch again. Meanwhile, many worthwhile trades are passed by because the two time frames never come into agreement. If you add a third time frame you have just increased your frustration level by 50%. After years of trying every imaginable time frame and combination of time frames, here are some practical conclusions: It is best to treat each time frame independently, and to take both entry and exit signals from just the one time frame. It can be tempting to switch time frames in the middle of a trade if a different signal is being generated in a different time frame, but it is often a mistake to do this. And, it is best to focus on only one time frame in any given market, and not be tempted by having several other time frames of that market on the screen. Multiple time frame trading can cause confusion and analysis paralysis. Many signals being generated by any number of the other time frames will of course be missed. However, by trying to watch several time frames simultaneously, many more signals will be missed. It is very difficult to keep focus, especially in day trading, on more than a couple of charts at a time. Nothing is perfect in trading. There is not one best time frame. On one day a certain time frame will capture the character of the market perfectly, but then the next day a different time frame will capture the day better. If you keep jumping around to different time frames there is less of a chance you will catch the good trades when your time frame gets back in synch. It can become an endless search for the perfect time frame. It is a moving target. It is chasing a rainbow. It is best to stay in the one time frame you are comfortable with, and let the market cycle come back to you. You will be in better synch with the market, better focused, and better able to jump on opportunities when they arise.
¹²2Ò³: ÉÏÒ»Ò³ [1] 2 ÏÂÒ»Ò³ |
