Multiple Timeframe Analysis in XAUUSD Trading

Multiple time frames analysis equals using 2 time-frames to trade xauusd - a shorter one used for trading and a longer one to check trend.

Since it's always good to follow the price trend, in Multiple Time Frame Analysis, the longer timeframe provides us the direction of the long term trend.

If the long term market direction is supporting the price direction of the smaller chart timeframe then the probability of being profitable is greatly/significantly increased. This is because even if you make a mistake the long-term trend will eventually save you. Also if you trade within direction of the market, then mostly you'll be on the winning side, this is what this type of trading analysis is all about.

Remember there a popular saying by many XAUUSD & stock market traders that says: "The trend is your best friend" - never go contrary the trading market.

There are four different types of traders - all these use different charts to trade just as is illustrated and shown below.

Examples of how each type of trader uses multiple Gold timeframes analysis strategies:

Scalpers in Gold Trading

This group holds onto their trade transactions for only a few minutes. Scalper never holds onto a trade for more than 10 minutes. With the main aim of earning just small number of pips as profit, 5 - 20 pips.

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

Multiple Chart Timeframe Analysis in Charts Analysis - How Do I Trade Using Multiple Chart Time-Frames?

Day Traders

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

Day trader 15 minutes chart wants to buy long, checks 1 Hour chart, which look like one below, since H1 shows market trend is moving up, then decides from the analysis it is okay to buy

Multiple Chart Timeframe Analysis in Charts Analysis

Swing Traders

This group of traders holds onto their trades transactions for a duration of few days to a week. With the objective of making a big number of pips profit, 100 to 400 pips.

Swing trader using the 1 Hour chart wants to short sell, checks 4 Hour chart, which looks like the trading examples illustrated and shown & described below, since 4 hour highlights the trend is moving down, then decides from the analysis it is okay button to sell.

How Do I Trade Using Multiple Chart Timeframes? - Multiple Chart Timeframe Technical Indicator

Position Traders

These are the gold traders that hold onto their trades transactions for a duration of weeks or months. With main goal of earning a large number of pips in trading profits, 300 to 1000 pips.

A Position trader using daily chart timeframe wants to short sell, checks week chart, weekly looks like one below, since weekly highlights the trend is moving down, then decides from the analysis it's okay button to sell.

Multiple Chart Timeframe Analysis in Charts Analysis - How to Trade Using Multiple Chart Timeframe

How to Define A Gold Trend

Using a strategy has Three technical indicators - MA(Moving Average) Cross Over System, RSI and MACD & uses simple guide-lines to define the trend. Rules are:

Upwards trend

Both MAs Moving Up

RSI Indicator above 50 Mark

MACD Above Centerline

Downward Trend

Both MAs Moving Averages Moving Down

RSI Indicator below 50 Mark

MACD Below Center-Line

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

Learn More Guides & Lessons:

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