The same market can look bullish on a 15-minute chart and bearish on a daily chart. Multiple timeframe analysis puts them in order so they work together instead of against each other.

The top-down method

1. Higher timeframe (daily or 4-hour): direction. What is the trend? Where are the major support and resistance zones?
2. Middle timeframe (1-hour): setup. Is price pulling back into a zone that matters on the higher chart?
3. Lower timeframe (15-minute or 5-minute): trigger. Is there a clear entry signal, such as a break of a small swing or a reversal candle?

A ratio of about 4 to 6 between timeframes works well: daily → 4-hour → 1-hour, or 4-hour → 1-hour → 15-minute.

Example

• Daily: EUR/USD is in an uptrend and pulling back towards a demand zone at 1.0800.
• 1-hour: price reaches 1.0805 and starts making smaller candles.
• 15-minute: price breaks above the last minor lower high. Buy, with the stop below the zone.

You buy in line with the daily trend, at a level that matters, with a precise entry and a tight stop.

Pitfalls

• Using too many timeframes until every chart says something different.
• Letting a lower-timeframe signal override the higher-timeframe picture.
• Trading the lowest timeframe without looking up at all.