Understanding Timeframes

Detailed content

Timeframes

Use multi‑timeframe analysis: HTF defines bias and levels; MTF refines zones; LTF gives triggers with defined risk.

Mapping

  • Scalping: HTF H1, MTF M15, LTF M1–M5
  • Day: HTF H4/D1, MTF H1, LTF M5–M15
  • Swing: HTF D1/W1, MTF H4, LTF H1

Real Example: Multi-Timeframe EURUSD Trade

Date: March 15, 2024; Style: Day Trading

Step 1: HTF Analysis (D1)

  • Trend: Strong uptrend since February
  • Key levels: Support at 1.0850 (prior swing low), Resistance at 1.0950
  • Bias: BULLISH — only look for long entries
  • Entry zone: 1.0850–1.0870 (support area)

Step 2: MTF Analysis (H1)

  • Structure: Price retracing to 1.0860 area
  • Indicators: RSI at 42 (approaching oversold in uptrend), 20‑EMA at 1.0865
  • Zone: 1.0860–1.0870 is confluence (D1 support + H1 EMA)
  • Wait for: Bullish candle reversal or break above minor resistance at 1.0875

Step 3: LTF Entry (M15)

  • Price reaches 1.0862
  • Forms bullish engulfing candle at 09:15 GMT
  • RSI on M15: 38 (oversold bounce forming)
  • Entry trigger: Long at 1.0865 (break of engulfing candle high)
  • Stop: 1.0850 (below D1 support, 15 pips risk)
  • Target 1: 1.0895 (prior H1 swing high, 30 pips = 2R)
  • Target 2: 1.0920 (D1 resistance area, 55 pips = 3.67R)

Trade Execution & Result

  • Size: Account $20,000, risk 1% = $200. Pip value $10/lot. Size = 200 ÷ (15 × 10) = 1.33 lots (round to 1.3)
  • Entry: 1.0865
  • Price action: Rises steadily, hits T1 at 1.0895 → Close 50% (+$390)
  • Management: Move stop to 1.0875 (breakeven + 10 pips)
  • Final: T2 hit at 1.0920 → Close 50% (+$715)
  • Total profit: +$1,105 (5.53R)
  • Time in trade: 4 hours 20 minutes

Timeframe Selection Guide

Style HTF MTF LTF Avg Trade Duration
Scalping H1 M15 M1–M5 5–30 min
Day Trading H4/D1 H1 M5–M15 1–6 hours
Swing D1/W1 H4 H1 2–10 days

Common Mistakes

  • Trading LTF against HTF: Scalping shorts on M5 when D1 is clearly bullish → Low win rate
  • Solution: Always check HTF first; only trade in HTF direction
  • Entering on HTF without LTF confirmation: Buying D1 support immediately without waiting for M15/M5 reversal
  • Solution: HTF shows where, LTF shows when