One of the key problems traders face is the contradiction of signals on different time frames. For example, a buy signal is formed on H1, and a sell signal is formed on H4. This creates uncertainty and can lead to erroneous decisions. In this digest, we will analyze how to link time frames correctly, how many to consider, and whether it is possible to trade, focusing on only one.
Why Do Contradictions Arise?
Each time frame displays a different level of detail of market movements:
- Junior time frames (M1-M30) give faster signals but contain more market noise.
- Medium (H1-H4) is used for a more balanced analysis.
- The older ones (D1-W1-MN) show global trends and important levels.
A contradiction occurs when the market is in a correction or consolidation phase at one level but continues to trend at another.
How Do We Link Time Frames Correctly?
The best way to eliminate contradictions is to use the multiple time frame method (MTF), analyzing the market on at least three levels:
- Global (senior time frame) – defines the primary trend. For example, if there is an uptrend on D1, then priority is given to longs.
- Working (middle time frame) – signals entry in the direction of the global trend. For example, on H4, you can look for corrections to enter the continuation of the D1 trend.
- Precise (junior time frame) – used to look for a specific entry point, for example, on M15 or M5.
If the trend is bullish in the senior time frame, but in the middle one, there is a correction, the junior time frame will help determine the endpoint of the correction for a trend entry.
How Many Time Frames to Consider?
The optimal number of time frames is three, which balances a global picture, a working signal, and an accurate entry. However, for scalpers, only two may be important (for example, M1-M5 and M15), while for position traders, analyzing D1 and W1 is sufficient.
Is It Possible to Trade Successfully in One Time Frame?
Technically, yes, but it increases the probability of mistakes. If a trader works only on one time frame, he risks ignoring the global trend or catching false signals during consolidation periods. To minimize this risk, you can use additional tools:
- Trend indicators (e.g., moving averages, MACD) to determine the overall trend.
- Support and resistance levels from higher time frames.
- Trend lines to see how strong the trend is, whether it is accelerating or decelerating.
- Volume analysis to confirm the strength of the movement.
Final Words
It is important to use the multiple time frame method to eliminate contradictions between time frames. It is optimal to analyze the market at three levels: global, working, and precise. Using only one time frame is possible, but it carries more risks. A competent combination of time frames allows you to improve the accuracy of signals and increase trading efficiency.