Lesson 20 | Which Timeframe Does What

In one sentence

The daily and 4-hour set the direction, the 1-hour and 30-minute are where you trade, and the 15-minute and 5-minute are where you find the entry.

Three layers

A full example (the process)

1. Daily: a downward push; the bounce stopped short of the rhythm line. Main direction: down.
2. 1-hour: down-bounce-down forms, 1.382 is reached, giving a valid point and a rhythm line.
3. Wait for the 1-hour bounce to approach the rhythm line.
4. 5-minute: below the rhythm line a reversal appears (say, a small down-bounce-down). Sell.
5. Stop beyond the 1-hour rhythm line; target the 1-hour 1.382.

An analogy

War. The daily is strategy: which way to attack. The 1-hour is the campaign: which hill to take. The 5-minute is tactics: when to charge.

The most common mistakes

1. Setting direction on the 5-minute. A 5-minute trend can change several times a day.
2. Trading when the entry signal fights the direction timeframe. If the direction timeframe points down and the entry timeframe gives a buy signal, it's only a bounce.
3. Jumping too far. Daily straight to one-minute hides all the structure in between.

Explain it in your own words

1. Which two timeframes set the direction?
2. What is the trading timeframe responsible for?
3. The daily points down and the 5-minute gives a buy signal. How do you read it?

Practice

Module 3 is done. Pick the last week of gold and write a complete three-layer analysis (daily, 1-hour, 5-minute): direction, model, entry, stop and target. This is your first multi-timeframe plan.

Previous: Lesson 19 | Perfect pushes and overlapping pushes　Next: Lesson 21 | How the three basics relate

This course teaches a method using past price action as examples. It does not forecast prices, recommend any broker or give investment advice.