Multiple time frame analysis is a vital component of the PrimedTraders systems and by taking the time to analyze multiple time frames, traders can greatly increase their odds for a successful trade.
Now many of the successful and profitable day and swing traders use multiple time frame analysis, if you haven't tried to apply this to your trading yet we suggest you try it out as soon as possible!
We also hope you enjoy this blog post and if it helps you, do give it a share on your social media or trading circles as it might help someone else too!
1D ETHUSD CHART:
Ethereum's daily chart suggests that we are still holding an overall bullish run, there are some minor signs that a bearish market could take place but I believe that the worst might just be over, I am talking about the lower high that formed on the 1st of December.
What the above chart suggests based on the PrimedTraders trading system is that we could be holding a solid bullish move, see the video at the bottom of this blog post for more information regarding our view on Ethereum and Bitcoin.
Now back at the above 1D chart of ETHUSD. All price action suggests that we could witness a major attempt of a bullish market, but since this is a daily chart the timing of this move, or even the fail of it, cannot be timed perfectly, thus what we will be doing is waiting for stronger confirmations on the lower time frames, such as the 1H.
Since we are primary a day trading community, meaning we get into trades for the day and we are out, in most cases in a matter of minutes, we do have to show you the 5M chart to explain how you could have taken advantage of what happened yesterday with Ethereum by applying multiple time frame analysis.
All you would have to know is the key levels of the 1D chart, see the major rejection of that support and then wait, with patience, for your edge (entry confirmation) to show up!
5M ETHUSD CHART:
The talking chart above shows you everything you need to know, but I'd like to take a minute and explain something you probably didn't know. After every major move on an asset, either up or down, the first major resistance that is formed, when price actually turns around becomes a very important resistance level, in this case we had a bear move so we focus on the resistance and when the resistance is done we wait for the support.
The above chart clearly shows you those two very important levels, the first resistance and the first support, they are the two levels you can base your day trading on, and as you can see, you could have made some solid profits trading these two levels.
Patience is a very important trait of any successful trader, the ability to wait for your edge to show up is a skill few people posses, think about it like this: You go to work for about 9 hours a day, you don't leave because you get bored right? Otherwise you'll be out of a job, why can't you just wait for the right indications to show up before executing a trade? At the end of the day, how well you enter will have a vital impact on your SL and overall success as a trader.
Patience is the key to trading success. Without it, you will quickly find yourself trading subpar setups and losing money left and right.
You can also watch this video in which we go over the same chart, but also Bitcoin too.