How to use different timeframes
Hello traders and investors!
Today I'll talk about choosing the right timeframe and how you can use different timeframes when looking for trades. This will help us uncover what is hidden in this candle on the chart.
When we look at something, we are usually limited by a certain viewpoint. From this point, we only see part of the whole picture. But if we move and look from a different perspective, we will discover new details and aspects that were previously unnoticed. The same applies to analyzing the chart of a financial instrument when using different types of charts or different timeframes. This post will focus on using different timeframes. On one timeframe, it may be difficult to understand the essence of what is happening, while on another, everything can become clearer and more understandable.
I've already talked about using different timeframes when looking for trades in an educational article a few weeks ago (see the related post below). In that article, I highlighted 5 skills that help effectively trade in sideways markets. Discussing the first of them - how to combine higher and lower timeframes when looking for trades, I provided a practical example on the OPUSDT chart using the daily and hourly timeframes. In that practical example, I formulated target levels that are likely to be reached. You can see the results in the related post (see below).
I'll provide another example of choosing the right timeframe and the correlation between timeframes, using the BTCUSDT chart. This will help us uncover what is hidden in this candle on the chart.
In the update of this idea tradingview.com/chart/BTCUSDT/sSZm9ljt-BTCUSDT-No-context-for-sales/, I noted that on the hourly timeframe at the contextual point of the seller (the beginning of the last seller impulse, level 66867), I didn't see an active seller and wasn't ready to join the sales at that moment. As a potential target, I indicated 62776.
So, I looked at the chart on different timeframes and searched for what remains unnoticed. On the 7-minute timeframe, I discovered a sideways movement at the contextual point of the seller (level 66867), as mentioned in the idea update with a recommendation to look for a trade after exiting the sideways movement and protecting this exit:
Now, let's analyze what happened next (on the bars chart, as bars take up less space and additional marks are better visible).
The seller broke through the lower boundary of the sideways movement at 65626.87.
The seller's impulse ended at 10:49 (New York time), when after breaking through the lower boundary of the sideways movement, the first buyer bar appeared.
The key candle(bar) of the impulse (the largest volume in the impulse) is marked on the chart as "KC". Therefore, the seller's defense of this candle or the lower boundary of the sideways movement (65626) increases the probability of further price decrease. The price range of the key candle of the impulse is highlighted on the chart (from high to close). Now let's pick a lower timeframe to see more clearly what happened before and after 10:49.
On the 1-minute timeframe by 10:49, a sideways movement formed, and at 10:49, the price attacked the upper boundary of the sideways movement (level at point 2).
The key candle of the buyer's impulse ("KC" on the chart) is in the middle of the impulse. At 10:59, the buyer attacked a new boundary of the sideways movement (level at point 6 - 65249.01). Pay attention to the volume of the attacking candle. At 11:02, the seller pressed the attack candle, forming a seller zone (red background on the chart). On the buyer's candle at 11:04 (black downward arrow on the chart), you can sell because:
And one more interesting point. Look where the seller's resumption on the minute timeframe came from - from the 50% of the key candle of the 7-minute timeframe seller impulse.
Could the price, without reaching the target of 62776, go up? Yes, the probability of this event is not zero. And we see how the price did not reach the target by 18 dollars (black upward arrow on the chart) and turned upward. Where did the seller stop it? It stopped right there inside the key candle of the sideways movement exit on the 7-minute timeframe (black downward arrow on the chart). After that, the target of 62776 was reached.
Today I'll talk about choosing the right timeframe and how you can use different timeframes when looking for trades. This will help us uncover what is hidden in this candle on the chart.
When we look at something, we are usually limited by a certain viewpoint. From this point, we only see part of the whole picture. But if we move and look from a different perspective, we will discover new details and aspects that were previously unnoticed. The same applies to analyzing the chart of a financial instrument when using different types of charts or different timeframes. This post will focus on using different timeframes. On one timeframe, it may be difficult to understand the essence of what is happening, while on another, everything can become clearer and more understandable.
I've already talked about using different timeframes when looking for trades in an educational article a few weeks ago (see the related post below). In that article, I highlighted 5 skills that help effectively trade in sideways markets. Discussing the first of them - how to combine higher and lower timeframes when looking for trades, I provided a practical example on the OPUSDT chart using the daily and hourly timeframes. In that practical example, I formulated target levels that are likely to be reached. You can see the results in the related post (see below).
I'll provide another example of choosing the right timeframe and the correlation between timeframes, using the BTCUSDT chart. This will help us uncover what is hidden in this candle on the chart.
In the update of this idea tradingview.com/chart/BTCUSDT/sSZm9ljt-BTCUSDT-No-context-for-sales/, I noted that on the hourly timeframe at the contextual point of the seller (the beginning of the last seller impulse, level 66867), I didn't see an active seller and wasn't ready to join the sales at that moment. As a potential target, I indicated 62776.
So, I looked at the chart on different timeframes and searched for what remains unnoticed. On the 7-minute timeframe, I discovered a sideways movement at the contextual point of the seller (level 66867), as mentioned in the idea update with a recommendation to look for a trade after exiting the sideways movement and protecting this exit:
Now, let's analyze what happened next (on the bars chart, as bars take up less space and additional marks are better visible).
The seller broke through the lower boundary of the sideways movement at 65626.87.
The seller's impulse ended at 10:49 (New York time), when after breaking through the lower boundary of the sideways movement, the first buyer bar appeared.
The key candle(bar) of the impulse (the largest volume in the impulse) is marked on the chart as "KC". Therefore, the seller's defense of this candle or the lower boundary of the sideways movement (65626) increases the probability of further price decrease. The price range of the key candle of the impulse is highlighted on the chart (from high to close). Now let's pick a lower timeframe to see more clearly what happened before and after 10:49.
On the 1-minute timeframe by 10:49, a sideways movement formed, and at 10:49, the price attacked the upper boundary of the sideways movement (level at point 2).
The key candle of the buyer's impulse ("KC" on the chart) is in the middle of the impulse. At 10:59, the buyer attacked a new boundary of the sideways movement (level at point 6 - 65249.01). Pay attention to the volume of the attacking candle. At 11:02, the seller pressed the attack candle, forming a seller zone (red background on the chart). On the buyer's candle at 11:04 (black downward arrow on the chart), you can sell because:
- On the hourly timeframe, the price is in the seller's impulse in the seller's area of interest, which defended the level 66867.
- On the 7-minute timeframe, the seller broke through the lower boundary of the sideways movement.
- On the 1-minute timeframe, the seller defended the level (65249.01) from the buyer's attack on a significant volume, which is within the price range of the key candle of the 7-minute timeframe impulse.
And one more interesting point. Look where the seller's resumption on the minute timeframe came from - from the 50% of the key candle of the 7-minute timeframe seller impulse.
Could the price, without reaching the target of 62776, go up? Yes, the probability of this event is not zero. And we see how the price did not reach the target by 18 dollars (black upward arrow on the chart) and turned upward. Where did the seller stop it? It stopped right there inside the key candle of the sideways movement exit on the 7-minute timeframe (black downward arrow on the chart). After that, the target of 62776 was reached.
Good luck with your trading!
t.me/user_friendly_trading
t.me/user_friendly_trading
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