Multiple Time-frame Analysis in Metals Trading

Multiple time-frames analysis equals using 2 chart timeframes to trade metal trading - a shorter one used for trading & a longer one to check the Metals trend.

Since it is always good to follow the trend, in Multiple Time Frame Analysis, the longer time-frame 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 metals trend will eventually save you. Also if you trade with the direction of metal market, then mostly you'll be on the winning side, this is what this analysis is all about.

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

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

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

Scalpers in Metals Trading

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 small amounts of pips as profit, 5 - 20 pips.

A Scalper using 1 min trading chart wants to buy long, checks 5 minute trading chart, that looks like the one below, since 5 minute explain metals trend is going up, then decides from this analysis it's okay to buy.

Day Metal Traders

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

Day trader trading 15 minute trading chart wants to buy long, checks 1 H chart, that looks like the one below, since 1 hour shows market metals trend is going up, then decides from this analysis it's okay to buy

Swing Metals Traders

This group holds on to their trades for a few days to a week. With the objective of making a large number of pips: 100 - 400 pips.

Swing trader using the 1 H chart wants to go short, checks the 4 H chart, which look like the metal examples illustrated & described below, since 4 hour shows the metals trend is going down, then decides from this analysis it's okay to sell.

Position Metal Traders

These are the traders that hold on to their trades for weeks or months. With the objective of making a large number of pips: 300 - 1000 pips.

Position trader using the daily trading chart wants to short sell, checks weekly chart, weekly looks like the one below, since weekly shows the metals trend is going down, then decides from this analysis it's okay to sell.

How to Define A Metals Trading Trend

Using a metals trading system has 3 indicators - Moving Average Crossover System, RSI and MACD and uses simple rules to define the trend. The rules are:

Upwards trend

Both MAs Moving Up

RSI above 50

MACD Above Centerline

Downward Metal Trading Trend

Both MAs Moving Down

RSI below 50

MACD Below Centerline

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