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Multi-Timeframe (MTF) analysis is not just about checking the trend on the daily before trading on the hourly; ideally, it involves examining and aligning context, structure, and timing so that every trade is placed with purpose.
When done correctly, MTF analysis can filter market noise, may help with timing of entry, and assist you in trading with the trending “tide,” not against it.
Why Multi-Timeframe Analysis Matters
Every setup exists within a larger market story, and that story may often define the probability of a successful trade outcome.
Single-timeframe trading leads to the trading equivalent of tunnel vision, where the series of candles in front of you dominate your thinking, even though the broader trend might be shifting.
The most common reason traders may struggle is a false confidence based on a belief they are applying MTF analysis, but in truth, it’s often an ad-hoc, glance, not a structured process.
When signals conflict, doubt creeps in, and traders hesitate, entering too late or exiting too early.
A systematic MTF process restores clarity, allowing you to execute with more conviction and consistency, potentially offering improved trading outcomes and providing some objective evidence as to how well your system is working.
Building Your Timeframe Hierarchy
Like many effective trading approaches, the foundation of a good MTF framework lies in simplicity. The more complex an approach, the less likely it is to be followed fully and the more likely it may impede a potential opportunity.
Three timeframes are usually enough to capture the full picture without cluttering up your chart’s technical picture with enough information to avoid potential contradiction in action.
Each timeframe tells a different part of the story — you want the whole book, not just a single chapter.
Scalpers might work on H1-M15-M5, while longer-term traders might prefer H4-H1-H15.
The key is consistency in approach to build a critical mass of trades that can provide evidence for evaluation.
When all three timeframes align, the probability of at least an initial move in your desired direction may increase.
An MTF breakout will attract traders whose preference for primary timeframe may be M15 AND hourly, AND 4-hourly, so increasing potential momentum in the move simply because more traders are looking at the same breakout than if it occurred on a single timeframe only.
Applying MTF Analysis
A robust system is built on clear, unambiguous statements within your trading plan.
Ideally, you should define what each timeframe contributes to your decision-making process:
- Trend confirmed
- Structure validated
- Entry trigger aligned
- Risk parameters clear
When you enter on a lower timeframe, you are gaining some conviction from the higher one. Use the lower timeframe for fine-tuning and risk control, but if the higher timeframe flips direction, your bias must flip too.
Your original trading idea can be questioned and a decision made accordingly as to whether it is a good decision to stay in the trade or, as a minimum action, trail a stop loss to lock in any gains made to date.
Putting MTF into Action
So, if the goal is to embed MTF logic into your trade decisions, some step-by-step guidance may be useful on how to make this happen
1. Define Your Timeframe Stack
Decide which three timeframes form your trading style-aligned approach.
The key here is that as a starting point, you must “plant your flag” in one set, stick to it and measure to see how well or otherwise it works.
Through doing this, you can refine based on evidence in the future.
One tip I have heard some traders suggest is that the middle timeframe should be at least two times your primary timeframe, and the slowest timeframe at least four times.
2. Build and Use a Checklist
Codify your MTF logic into a repeatable routine of questions to ask, particularly in the early stages of implementing this as you develop your new habit.
Your checklist might include:
- Is the higher-timeframe trend aligned?
- Is the structure supportive?
- Do I have a valid trigger?
- Is risk clearly defined?
This turns MTF from a concept into a practical set of steps that are clear and easy to action.
3. Consider Integrating MTF Into Open Trade Management
MTF isn’t just for entries; it can also be used as part of your exit decision-making.
If your higher timeframe begins showing early signs of reversal, that’s a prompt to exit altogether, scale out through a partial close or tighten stops.
By managing trades through the same multi-timeframe approach that you used to enter, you maintain logical consistency across the entire lifecycle of the trade.
Final Action
Start small. Choose one instrument, one timeframe set, and one strategy to apply it to.
Observe the clarity it adds to your decisions and outcomes. Once you see a positive impact, you have evidence that it may be worth rolling out across other trading strategies you use in your portfolio.
Final Thought
Multi-Timeframe Analysis is not a trading strategy on its own. It is a worthwhile consideration in ALL strategies.
It offers a wider lens through which you see the market’s true structure and potential strength of conviction.
Through aligning context, structure, and execution, you move from chasing an individual group of candles to trading with a more robust support for a decision.
US markets took a big hit overnight after a mixed bag of earnings were released from the tech sector. Google’s parent company, Alphabet, took a 9.5 percent hit in yesterday’s session after releasing some disappointing earnings numbers on their cloud computing business. The $1.5+ trillion company has enough weight to pull down the indices with a move like this, and we saw the Nasdaq fall close to 2.5%, and the S&P 500 fall 1.43%.
This sell-off has landed the S&P 500 heavily into a horizontal support zone around 4,170-4,200, so we will be watching to see if this level can hold. If this falls, there is a bit of room to the next level around 4,060-4,080. Over in FX, the Aussie dollar saw plenty of volatility in yesterday’s session off the back of hotter than expected CPI data.
After a temporary spike up to 63.991, price has fallen away aggressively, down over 1.4% since yesterday’s highs. US dollar strength cleared any CPI gains, after markets shifted back into risk-off mode with the disappointing tech earnings and escalating tensions in the middle east. Later today we will have some US GDP data out, plus the ECB is releasing their latest interest rate decision.
Both key data events are worth monitoring for USD or EUR pairs.
As major indices continue to look weak and test key technical levels, ongoing market sentiment is difficult to judge, with several crucial information points coming up over the next few days. #1 The Fed Rate Decision The Federal Reserve's narrative remains hawkish in terms of medium-term interest rates. Friday's PCE data did little to calm fears of not only a prolonged period of high interest rates but also the possibility that there may not be any rate reduction considered until Q2 2024. As always, it will be not only Wednesday's actual decision (which is expected to be a pause at the current 5.5%) but also the statement and subsequent press conference by Jerome Powell that are likely to have the major market impact. #2 Middle Eastern Conflict With the escalation of conflict in the Gaza Strip, and with Israeli ground forces now pushing over the border, concerns will continue as to whether the conflict will be contained within that area or if there is a possibility of a broader conflict ensuing.
While most Western governments are calling for a humanitarian ceasefire to get aid into Gaza—and concerns are rising regarding the ever-increasing civilian casualties—markets will be fearful of further escalation, increasing destabilization in the area, and the ramifications of such not only on energy prices but also on global markets as a whole. #3 US Company Earnings As we enter the new and busiest week (Week 3) of Q3 earnings reporting season in the US, to date, 49% of the S&P 500 companies have reported. An impressive 78% have reported a positive EPS surprise, and 62% of S&P 500 companies have reported a positive revenue surprise. The blended year-over-year earnings growth rate for the S&P 500 is at 2.7%.
If this turns out to be the actual growth rate for the quarter, it will mark the first quarter of year-over-year earnings growth in two years. With the forward 12-month P/E below the 5-year moving average of 17.1, this suggests stock valuations are favourable. Normally, without current market pressures—including 16-year highs on US Treasuries—this would bode well for stocks going forward; however, at this stage, headwinds remain strong for any immediate uptick in stock prices.
The S&P 500 index is currently teetering on the edge, desperately holding onto a crucial support level. This level has proven its resilience with two prior bounces, so traders are keeping a close eye on whether it can endure the pressure once more. After enduring four consecutive red days, there was a sigh of relief overnight as the market managed to post a green day, coinciding with the critical support level.
The broader picture reveals a challenging September for the S&P 500, with a monthly decline so far of 3.78%, following August's 1.77% drop. Lingering concerns of an impending recession, coupled with the Federal Reserve's unwavering commitment to maintaining higher interest rates for an extended period, have been the driving forces behind this recent downturn. Monday's bounce brought some respite, suggesting that investors might be regaining their composure after several days of selloffs.
From a technical standpoint, the current support level is important. Should it fail to hold, the index could potentially see a further decline of 2-3%, targeting the next horizontal support level. Interestingly, there is another layer of support not far below the current horizontal level in the form of a diagonal support line.
This diagonal support line could be something for traders to watch, as it could act as a potential area of activity if the horizontal level falls.
It’s that time again, the looming US FOMC meeting is upon us. Once again, investors and analysts are confident that they know the result. With the rate currently at 5.50%, markets have priced in a hold, with the CME FedWatch Tool giving it a 99.6% probability of the second consecutive hold for the Fed.
Let’s explore that 0.4% chance that a hold might not happen. As you can see from the above chart, there has been a spectacular rise in the Fed Funds Rate since early 2022 when US inflation started to soar. Each Federal Open Market Committee (FOMC) meeting that occurs, the members assess economic conditions, monetary policy and make the big decision on what to do regards interest rates.
The rapid ascent of the Fed Funds Rate has been an attempt to tame the post Covid-19 inflation, with a fair bit more to go. While inflation is easing, recent GDP data in the US signaled a growing economy, which would be a key talking point in the upcoming FOMC meeting. Let’s look at a few scenarios on the markets for this month’s FOMC meeting.
Hold – With inflation easing, and no major data released in the past month to indicate a reversal, markets have priced in a hold at November’s meeting. As this has been widely accepted, this has been priced into the markets, and I’d expect minimal movements in both US equities and the USD if rates are on hold. Cut – With inflation still above the Fed’s target range, a cut is very unlikely.
However, in the slim chance they decide they’ve done enough and are ready to take their foot off the accelerator, we could see plenty of volatility across both the US equity markets and the US Dollar. Signalling that the Fed thinks the worst is over, US equities could rally on the newfound confidence that they’ve made it through the uncertain times, and cost of living may begin to ease. A cut could see USD lose strength, as investors may look to rotate into other higher yield currencies.
I’ll be watching the major USD pairs for plenty of volatility if a cut is seen. Hike - While inflation is easing, there are still signs the economy isn’t ‘breaking’ as much as it should be with such high rates. Recent US GDP data came in above forecasts, which I’m sure is being heavily looked at in the November FOMC meeting.
In the chance the Fed believes further work is needed and hike, I’d expect a short-term sell-off in the US equity markets and a rally in the USD. With the US Dollar Currency Index (DXY) bouncing between a range of around 105-107 for the past month, November’s FOMC meeting might be enough to kick it one direction if we see either a Hike or a Cut. As analysts generally price in the expected decision prior to the announcement, eyes generally shift to the FOMC statement and press conference after the data is released.
The statement and press conference sees Fed Chair Powell discuss the decision and gives an indication on their plans. Analysts will be analysing every word to try and get hints on the Fed’s future movements and will be looking for either more aggressive ‘Hawkish’ language or more cautious ‘Dovish’ language. I’m bracing for volatility across the USD pairs during this speech, and the language used will determine the direction.
Hawkish language can see strength in the dollar, while dovish can see weakness.
The first week of the new quarter has so far been an interesting one, rampant US treasury yields breaking out to 16-year highs, a USD that just keeps going up and now it seems the Japanese Ministry of Finance is directly intervening in currency markets. USD rose to a high of 107.35 on the back of a surge in yields and a hawkish US JOLTS report which showed the US labor markets resilience. Fed member Mester also spoke noting the Fed will likely need to hike rates one more time this year adding to the higher for longer narrative.
The USD did dip later in the session on what seemed to be a Japanese FX intervention, DXY still holding the key 107 level though. JPY was again weak early in the session with USDJPY hitting a high of 150.16, above the “line in the sand” at 150. The weakness dramatically reversed on what could only be a BoJ intervention in the FX market seeing USDJPY sharply move lower 3 big figures in a heartbeat, hitting a low of 147.31.
There has been no official confirmation this was an intervention but with recent jaw boning from Japanese officials threatening just that, it seems obvious it was. USDJPY recovered after the dust settled to reclaim the 149 level, but from my experience this won’t be the last intervention so USDJPY longs should tread with caution from here. AUD underperformed with the Aussie struggling against a strong USD, sour risk sentiment and post RBA where the Aussie Central Bank kept rates on hold and gave nothing extra for the hawks in their statement.
AUDUSD dipped below 0.63 before finding some support around the Nov ’22 lows and retaking the 0.63 support level for now. Today’s economic announcements:
USD traded in a tight range on Tuesday despite a big move higher in treasury yields after a beat in US retail sales figures, the headline rising 0.7% M/M vs 0.3% expected. DXY whipsawing within a contained range, hitting a high of 106.52 on the initial reaction to the retail sales figure, but quickly paring gains to hit a low of 106.02. Fed member Barkin Fed’s also spoke noting that the FOMC will have a good debate when asked about the chance of a Fed hike at heir November meeting.
Looking ahead, Fed speakers are set to continue, ahead of Chair Powell on Thursday, also any further geopolitical updates will be closely watched by USD traders. AUD and NZD were divergent on Tuesday, with the Aussie the G10 outperformer and the Kiwi the laggard. AUDUSD continuing its bounce off the major support at 0.6286 to rally to a high of 0.6380, helped along by what was seen as hawkish RBA minutes released during the session.
NZDUSD on the other hand struggled after a not as hot as expected NZ CPI, NZDUSD dipping to test the October lows at 0.5871 before finding some support.. AUDNZD surged higher, retaking the key 1.07 level and within a whisker of also breaching 1.08 JPY faltered against the USD despite seeing strength early in the session after a Bloomberg report that the BoJ was considering revising their inflation forecasts higher. The surge in the Yen swiftly faded with yield differentials pushing USDJPY higher, to hover just below the 150 “intervention zone” Today’s calendar below: