Multiple Time Frame Analysis (MTFA) is a technical analysis used by many traders and is particularly suitable for Forex traders who can only invest a certain amount of time in trading.。Please review the MTFA guide for more details on this policy and how to use it。

What is Multiple Time Frame Analysis?

Multiple Time Frame Analysis (MTFA) is a form of evaluation utilized by traders in forex trading and is classified as Technical Analysis。This is crucial when traders want to measure or track the performance of a currency over a specified time frame。This is a useful trading strategy for breakout traders, event risk traders, day traders and momentum traders. The reason behind it is that MTFA allows traders who invest several hours in foreign exchange trading to understand the performance of the currency in a long period of time.。

When and how to use multiple time frame analysis

MTFA is used to track the performance of currency pairs at two or more compressions / frequencies。In Forex trading, many traders have come up with different views on the amount of compression / frequency that can be tracked at any given time。However, the average number tracked by most traders is three because:

• Any data below three will cause data loss, which will cause the results to be biased, which will affect the trader's profitability。
• Any number more than three will make the data difficult to understand, especially for amateur forex traders。

Determine time frame

When proposing these three compressions / frequencies, it is recommended that you use the four rules。The four rules state that traders first need to determine the medium-term time frame.。Once the medium-term time frame is determined, the next step is to determine the short-term time frame。Finally, traders must find long-term time frames。

When determining these time frames, keep in mind that the medium-term time frame should be "reasonable" and consistent with the monitoring cycle you wish to observe。The short-term time frame should be at least one quarter of the medium-term time frame, while the long-term time frame should be at least four times the medium-term time frame。

In practice, this means that if the medium-term time frame is 60 minutes, the short-term is 15 minutes and the long-term is 240 minutes。

Long term time frame

When multiple time frame analysis is involved, traders are advised to start monitoring long-term time frames and then move to other time frames。This is because long-term time frames give traders the opportunity to notice trading trends.。

As you probably know, studying trends is a prerequisite for forex trading strategies。While it is recommended to start monitoring long-term time frames, traders should not make decisions based on long-term time frames。

Medium-term time frame

The medium-term time frame is the most flexible because it can freely swing between the short-term time frame and the long-term time frame。Medium-term time frames are useful, especially when you want to monitor major economic trends。

The trends revealed by the medium-term time frame are largely in line with current trends in the market。Therefore, traders are advised to base their decisions on the more prominent trends in the medium-term time frame。

Short-term time frame

As you would expect, short-term time frames are accompanied by higher volatility。Because the transactions outlined in this analysis were conducted in a relatively short period of time and included all price increases and decreases。