How to choose a Timeframes for trading?

Multitimeframe analysis

Modern trading software allows traders to view the price action on many different timeframes and quickly switch between them. Professional traders have long since discovered that the analysis of multiple timeframes can make trading more profitable.

The classic solution is to use a set of 3 timeframes. Fewer timeframes won’t allow you to filter out false signals, while more timeframes will give you too much data to process.

When choosing your timeframes combo, start by picking out the medium-term timeframe depending on how long you plan to hold your trade. Then choose a smaller timeframe and a larger timeframe. It’s good when the medium timeframe is 4 times bigger than the small one and 4 times smaller than the big one (ex.: H4-H1-M15).

Once you have chosen your timeframes, you can start the analysis. The most important thing here is to analyze the timeframes in the right order. The correct way is to start with a larger timeframe and then switch to a smaller one. Otherwise, there will be a considerable risk that you pick an idea that has a low probability of success as price action on smaller timeframe may be a form of market noise that leads nowhere, whereas a shift on a big timeframe will change the situation on a small timeframe as well.

The famous trader Alexander Elder proposed the following scheme of working with 3 timeframes:

Large timeframe: identify the overall trend using a 13 EMA and MACD.

Medium timeframe: find a point where a counter-trend correction ends using the Stochastic Oscillator or other oscillators.

Small timeframe: find a place for your order by trailing a pending order (Buy Stop or a Sell Stop). You trade should be in the direction of the main trend you see on the large timeframe.

Such a strategy, also known as the Triple Screen System, allows getting the trading signals which have the highest probability of success. The first timeframe will generate many signals, while the other two will allow to pick the best of them and make a precise market entry.

Multiple timeframe analysis is a universal concept for trading financial markets. So, no matter whether you are a scalper or a position trader, make sure you reap the benefits of analyzing several timeframes.

Frequently asked questions

How to withdraw the money you earned with FBS?

The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.
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