Summary: Multiple Time Frame Analysis

Question 1

What is the ‘Bird’s Eye View’ in trading?

Answer 1

Using multiple time frames to see the big picture and avoid being blinded by small price movements.

Question 2

What is the main benefit of using multiple time frame analysis?

Answer 2

It resolves contradictions between different indicators and time frames.

Question 3

How does multiple time frame analysis help with trend changes?

Answer 3

It enables you to spot potential trend changes earlier by seeing them develop on lower time frames first.

Question 4

What is the recommended number of time frames to use for a single trade?

Answer 4

Stick to two or three time frames (any more is overkill).

Question 5

What is the danger of using more than three time frames?

Answer 5

Information overload and ‘Analysis Paralysis’ (your brain might explode/messy desk syndrome).

Question 6

What is the first step once you have found your preferred time frame?

Answer 6

Go up to the next higher time frame to make a strategic decision (Long or Short).

Question 7

What do you do after making a strategic decision on a higher time frame?

Answer 7

Return to your preferred (or lower) time frame to make tactical decisions (Entry and Exit).

Question 8

True or False: Multiple time frame analysis helps you stay in a trade longer.

Answer 8

True (it helps you identify where you are relative to the Big Picture).

Question 9

How should you choose which time frames to watch?

Answer 9

Pick a set that fits your personality and only concentrate on those (practice switching between them).

Question 10

What does BabyPips say about ‘tunnel vision’ traders?

Answer 10

They only rely on a single time frame and are often blindsided by new trends coming from other time frames.