Multiple Time Frame Analysis in Bitcoin Trading

Multiple time frames analysis equals using 2 chart timeframes to trade BTC/USD Crypto - a shorter chart time-frame used for trading and a longer chart time-frame to check the Bitcoin price trend.

Since it's always good to follow the market trend, in Multiple Time-frame Analysis, the longer chart time-frame gives us the direction of the long term Bitcoin price trend.

If the long-term market trend direction supports the direction of the smaller chart time frame then the probability of being profitable is greatly increased when using this setup. This is because even if you make a mistake in opening your Bitcoin trade the long-term trend will eventually save you. Also if you trade with the direction of market trend, then mostly your trades will be on the winning side, this is what this multiple timeframe analysis is all about.

Remember there a popular saying by many traders and investors that says; "The trend is your best friend' - never go contra the market trend. It means that trading along the direction of the trend is what will consistently help you as a trader to continue making profit when trading the online Bitcoin Crypto Currency market. There are four different types of Bitcoin traders - all these traders use different chart timeframes to trade as shown below.

Examples of how each type of Bitcoin trader uses multiple timeframes analysis trade strategy:

Scalpers

This group of traders holds onto their trades only for a couple of minutes. Scalper never holds onto a trade for more than ten minutes. With the objective of making a small amount of profits between $30 and $50 per trade.

A Scalper using 1 minute trading chart time-frame wants to open long, checks 5 minute BTCUSD chart, that looks like the one below, since 5 minute show trend is heading up, then the trader decides from this trading analysis that it's okay to buy BTCUSD.

Bitcoin Multiple Timeframe Analysis in Bitcoin Price Charts Trading

Scalper Bitcoin Chart Time frame - 5 Minute BTCUSD Chart

Day Traders

This group of Bitcoin traders holds on to their trades for a couple of hours but not more than a day. With the objective of making quite a number of dollars in profit, between $50 and $200 per trade.

Day trader trading 15 minutes BTC/USD Crypto chart timeframe wants to go long, checks 1 hour chart, that looks like the one below, since 1 hour displays price trend is heading up, then decides from this analysis it is okay to buy Bitcoins.

Multiple Chart Timeframe Analysis Bitcoin - Bitcoin Multiple Chart Timeframe Analysis Trading

Day Trader Bitcoin Chart Time frame - 1 Hour BTCUSD Chart

Swing Traders

This group of Bitcoin traders holds on to their trades for a couple of days to a week. With the objective of making a large number of points in profit, between $200 and $1,000 in profit.

Swing trader using 1 H Bitcoin Crypto Currency chart wants to go long, checks the 4 hour chart, that looks like the example below, since 4 hour chart shows the trend is heading up, then decides from this analysis it is okay to buy Bitcoin.

Multiple Chart Timeframe Bitcoin Analysis - How to Interpret Bitcoin Charts Using Multiple Charts Timeframes

Swing Trader Bitcoin Chart Time frame - 4 Hour BTCUSD Chart

Position Bitcoin Crypto Currency traders

These are the investors that hold on to their Bitcoin trade transactions for weeks or months. With the objective of making a large number of points in profit of between $1,000 and $2000 per trade.

Position trader using the daily Bitcoin Crypto Currency chart time frame wants to go long, checks the weekly chart, week resembles the one below, since weekly displays the trend is heading up, then position trader decides from this analysis it is okay to buy BTCUSD.

Multiple Timeframe Chart Analysis in Bitcoin Price Charts Analysis Examples Explained

Position Trader Bitcoin Chart Time frame - Weekly BTCUSD Chart

How to Define A BTCUSD Trend

As a beginner trader wanting to start trading Bitcoins you may want to learn how to define a trend. You can define the trend using a Bitcoin system that has Three indicators - MA Crossover System, RSI & MACD and using simple trading guide-lines to define the market trend. The rules are:

Upwards trend

Both Moving Averages are Moving Upwards
RSI above 50
MACD above Center Line

Down-ward BTCUSD Crypto Trend

Both Moving Averages are Moving Downwards
RSI below 50
MACD below Centerline

For more explanation about how to define price trend & using Bitcoin systems read the article on how to generate signals using a Bitcoin system, explained on this web site.

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