Multiple Time Frame Analysis

Multiple timeframes analysis equals using 2 chart timeframes to trade xagusd - a shorter one used for trading and a longer one to check the trend.

Since it is always good to follow the market trend, in Multiple Time-Frame Analysis, longer timeframe gives us the direction of the long term trend.

If the long term market direction supports the direction of the smaller chart timeframe then the probability of being profitable is greatly increased. This is because even if you make a mistake the long term trend will eventually save you. Also if you trade with the direction of xagusd market, then mostly you will be on the winning side, this is what this analysis is all about.

Remember there is a popular saying by many Silver and stock market investors that says: "The trend is your friend" - never go against the xagusd market.

There are four different types of Silver traders - all these use different charts to trade as explained below.

Examples of how each type of trader uses multiple Silver Trading timeframes analysis strategy:

Scalpers

This group holds on to their trades for only a few minutes. Scalper never holds on to a trade for more than ten minutes. With the objective of making a small amount of pips as profit, 5 - 20 pips.

A Scalper using 1 min chart wants to long, checks the 5 minute chart, which looks like one below, since 5 min show trend is heading up, then decides from this analysis it is okay to buy.

Day Traders

This group holds on to their trades for a few hours but not more than a day. With the objective to make quite a number of pips, 30 to 100 pips.

Day trader trading 15 minutes chart wants to go long, checks the 1 H chart, which looks like one below, since 1 hour portrays market trend is heading up, then decides from this analysis it is okay to buy

Swing Traders

This group holds on to their trades for a few days to a week. With the aim to make a big number of pips, 100 to 400 pips.

Swing trader using the 1 Hour chart wants to short, checks 4 Hour chart, that looks like the xagusd trading example explained and shown below, since 4 hour portrays the trend is heading down, then decides from this analysis it is okay to sell.

Position traders

These are the investors that hold on to their trades for weeks or months. With the aim to make a big number of pips, 300 to 1000 pips.

Position trader using the daily chart wants to go short, checks the weekly chart, weekly looks like one below, since weekly portrays the trend is heading down, then decides from this analysis it is okay to sell.

How to Define A Trend

Using a trading system has three indicators - Moving Average Cross-over System, RSI & MACD and uses simple rules to define the trend. Rules are:

Upward trend

Both MAs Moving Up

RSI above 50

MACD Above Center-Line

Downward Trend

Both MAs Moving Down

RSI below 50

MACD Below Center Line

For More explanation about this system read: How to Generate Silver Trading Signals With a Silver Strategy.