Many traders encounter the issue of conflicting signals across different time frames. For instance, you might identify a key turning point on a 1-hour chart, only to switch to the daily chart and find that the trend is completely opposite. This can be quite perplexing—should you take the trade or not?

You might also experience a sense of not being able to profit within a certain time frame. For example, you might be doing well on the 1-hour chart but spot a great opportunity on the daily level. After placing an order, you realize that the daily trend is too slow, and the holding period is too long, which is entirely different from your original trading rhythm and feels out of sync.

Many friends feel lost when it comes to choosing the right trading time frame and dealing with the contradictions between different time frames. So today, I will discuss how to handle these multi-time frame issues.

In today's article, I will explain: why different time frames can lead to conflicting signals, the rhythm and characteristics of different time frames, how to choose a time frame that suits you, and share trading methods for single and double time frames.

1. It is normal for bulls and bears to clash in different time frames.

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The first step in trading is to determine the direction of the market, and then buy or sell accordingly.

Traders who use technical analysis, like us, typically use technical indicators to determine the direction, such as moving averages, trend lines, MACD, RSI, and so on. Most indicator patterns are calculated based on the closing prices of the candlesticks on the chart. Different time frames have different candlestick prices, leading to different indicator movements.

For example, in a 1-hour period, there are four 15-minute candlesticks. The MACD indicator on the 15-minute chart may change four times, but at that moment, the MACD indicator on the 1-hour chart has only changed once.

Therefore, the same technical indicators can provide different assessments of the market's bullish or bearish sentiment across different time frames. Consequently, in trading, we may find that a 1-hour chart is bullish while a 4-hour chart is bearish, leading to a clash between the two. This is normal.

Each time frame is an independent perspective for observing the market.Therefore, before we determine our own trading methods, we must first choose the trading period. And during the trade, we cannot switch the period randomly on the spot, otherwise the trade will become chaotic.

2. Different periods imply different trading rhythms.

Let's look at three pictures, which are the same trend line breakage for long and short trading logic, compared in 10 trades of different periods.

The first picture is the 1-hour level trade.

The picture shows the 1-hour candlestick chart of gold. Trading 10 times with a trend line took a month, with the shortest position being closed the next day and the longest position being closed in 6 days, totaling 22 trading days, with an average of one trade every two days.

In the trade, the larger stop loss is around 100 points, and the smaller one is around 30-40 points.

Continue to the second picture, the 15-minute level trade.

The picture shows the 15-minute candlestick chart of gold. Trading 10 times with a trend line took 11 days, with the shortest position being closed on the same day and the longest position being closed in 4 days, with most positions being held for 1-2 days. The larger stop loss in the trade is 60-70 points, and the smaller one is 20-30 points.

Continue to the third picture, the 4-hour level trade.

The picture shows the 4-hour candlestick chart of gold. Trading 10 times with a trend line took 5 months, with the shortest position being held for 5 days and the longest position being held for more than 40 days. Most positions are held for ten to twenty days, with the largest trade stop loss reaching 500 points, and the smaller ones are also between 100-200 points.1-hour level trading is relatively relaxed and can be done part-time. The method mentioned above involves trading only once every two days, so checking the market 2-3 times a day is sufficient. It doesn't interfere with your work, shopping, or watching movies.

Once the order is placed, set your stop-loss and take-profit levels, and let the market run its course. There are fewer trading opportunities, fewer openings, and slower closings.

For 15-minute trading, you need to keep a closer eye on the market. There is one trading opportunity per day. If you go down to a 5-minute level, it essentially requires the trader to be in front of the computer at all times, focusing intently and maintaining a high level of alertness. During trading, aside from monitoring the market, you can hardly do anything else.

4-hour level trading is a completely different process. Over 5 months and more than 100 trading days, only 10 orders were made, averaging one trade every 10 days, so there's no need to watch the market every day.

The feeling of trading can be described as "too idle." Its presence in life is minimal, often with no trading opportunities for a week. The number of openings is pitiful, and of course, holding an order for dozens of days requires a great deal of patience.

By comparison, choosing different trading periods means you are choosing different trading styles. It's similar to choosing a fast-paced or slow-paced lifestyle in your life.

From this perspective, it's crucial to select a period that suits you because trading is not a one-time event; it may require hundreds or thousands of experiences. You must choose a period that matches your life rhythm and personality to achieve maximum efficiency with minimal effort.

So, how do you choose a period that suits you? Let's continue to look further.

3. How to Choose the Right Period for Yourself?

If you are trading part-time, you can opt for periods longer than 1 hour. Shorter periods involve too frequent operations, which can interfere with your regular work.After all, trading is not just about placing an order. Before opening a position, one must observe the market, calculate the position size, enter the market, set stop losses and take profits, adjust positions, and so on.

For trades under 1 hour, making two transactions a day can be quite busy, and it is generally too much for part-time traders to handle.

If you are considering a larger time frame, such as the 4-hour or daily chart, it is also feasible as long as you have the patience.

If you are interested in intraday or short-term trading, the 15-minute and 5-minute charts are both good choices.

There is only one way for part-time traders to engage in intraday trading: to do so outside of working hours, for example, during the evening rest time after work, engaging in short-term intraday trading during the night session.

The above content explained the rhythm and characteristics of different time frames. Next, I will explain two practical methods for different time frames, including one for a single time frame and one for a dual time frame.

4. Two practical methods for different time frames.

I. Single-time frame trading.

Single-time frame trading, as the name suggests, involves using only one time frame in trading, with entry points for orders, and setting standards for stop losses and take profits all within the same time frame. The three examples given above are all single-time frame trades.

To facilitate the examples, I only used simple trend lines as the criteria for judging long and short trades.In fact, single-cycle single-indicator trading is a rather aggressive approach, which does not filter trading signals sufficiently, leading to a higher frequency of consecutive errors and greater difficulty in practical operation. Therefore, single-cycle trading usually incorporates indicator filtering to enhance stability.

Below is an explanation of a method: using trend lines combined with moving averages to determine entry and exit points in the trend.

After the market breaks through the trend line, it also requires the crossover resonance of EMA30 and EMA15 to enter the market. A break above the trend line should be accompanied by a golden cross, while a break below the trend line should be accompanied by a death cross.

The chart shows a 1-hour candlestick chart of gold. After a continuous rise, the market began to fall back, first breaking through the uptrend line. After breaking through the trend line, the market consolidated slightly below the trend line, and after the moving averages formed a death cross, a short position was entered, followed by a significant market decline.

Note: If single-cycle trading is not filtered carefully enough, it is necessary to add indicators as filtering conditions to improve stability.

Of course, after filtering through indicators, the frequency of trading will also decrease. For example, at the 1-hour level, if you trade based solely on the logic of trend line breaks for long and short positions, you might trade 10 times a month. If you use the moving average crossover and trend line resonance for trading, the trading frequency might drop to 6 to 7 times.

II. Double-cycle trading.

Double-cycle trading refers to the use of two cycles, one large and one small, in trading.

There are two most basic logics involved:

One is that the large cycle establishes the direction, the small cycle enters, and takes the trend of the large cycle. This approach can achieve a very good reward-to-risk ratio.Another logic is that the long cycle establishes the direction, the short cycle enters the market, the short cycle exits, takes the short cycle's wave, relies on the trend of the long cycle, and improves the success rate of wave trading.

Below, I will explain separately.

The first method is that the long cycle trend line is broken to confirm the direction, and the short cycle enters the market using the trend line and moving average resonance, exits in the long cycle, and takes the big trend. Everyone can see the schematic diagram.

The diagram shows the k-line of spot gold, with the left side being the 1-hour k-line and the right side being the 5-minute k-line.

After the left side of the diagram breaks the trend line, it enters the bearish trend. At this time, switch to the 5-minute k-line. When the 5-minute market breaks the trend line, and the two moving averages form a death cross, enter the market. Set the stop loss at the high point of the rebound, and exit the order in the long cycle.

The second method is also to use the trend line broken by the long cycle to confirm the direction, and the short cycle enters the market using the trend line and moving average resonance. However, when exiting, take the profit and loss ratio of the short cycle's wave, and exit with a small space stop profit.

The diagram shows the k-line of spot gold, with the left side being the 1-hour k-line and the right side being the 15-minute k-line.

After the left side of the diagram breaks the trend line, it enters the bearish trend, and the hourly chart enters a trend of oscillating and falling.

In this trend, on the right side of the 5-minute level, whenever the market appears with a downward trend line and moving average intersection, enter the short position. After entering, set a fixed profit and loss ratio, and exit with a small space.

In the hourly chart, every rebound and falling trend can make a small wave profit at the 5-minute level, and the success rate is very high. There are a total of 5 trading opportunities in the diagram, only one is stopped, and the rest of the orders are all stopped profit.Pay attention: The double period is the most widely used practical cycle, which is very convenient to operate and has good results. When choosing these two cycles, be careful not to let the gap between the two cycles be too large or too small. Because two cycles that are too close to each other are too similar, just like two magnets that are too close to each other, they will stick together and cannot move, and cannot make a difference in size. Two cycles that are too far apart are like two magnets that are too far apart from each other, and they are out of the magnetic field, and will not have an impact on each other, losing the meaning of the double cycle.

5. Common problems and precautions of the cycle.

(1) Beginners prefer short cycles, while veterans prefer long cycles.

This phenomenon is very obvious among traders. Newcomers to trading are fresh to trading, like the thrill of trading, and have a big addiction, so they prefer short cycle trading. Because the frequency of short cycles is high, they can open and close positions very quickly, and they can also quickly know the results of the trade. However, short cycles are very close to the market, and the mentality fluctuates too much, and it is easy to be taken away by the market, lose rationality, and lead to more serious losses. However, experienced traders have passed the freshness of trading, and understand the importance of keeping a distance from the market, because it can make the trader's mentality more stable, the execution ability is stronger, and it is easier to make money.

Here, I also strongly suggest that you do not trade too short cycles, otherwise you will feel what it is like to be dominated by human nature. (2) Don't be unwilling, just use the cycle you have chosen.Today, we discussed so many issues about period selection and provided everyone with criteria for choosing periods. Once you have decided on the period you want to work with, do not change it arbitrarily, and certainly do not switch periods back and forth in actual combat to look for opportunities or directions. This is because different periods have different directions, trading rhythms, and feelings; constantly switching will only make you more confused and disoriented. It is better to delve deeply into the period you have chosen, to refine and perfect it, which will lead to better profit outcomes.

(3) It is not recommended to use too many periods.

Today, we focused on the single-period trading method and the dual-period trading method. In fact, there are also multi-period trading methods, such as the three-period trading method I mentioned before, with the trading logic of "go with the major trend, against the medium trend, and go with the minor trend." However, I do not recommend using too many periods for trading because it will make your trading process very complicated and inconvenient for actual combat operations.

Moreover, I have reviewed and statistically analyzed the data, and more period filtering does not significantly help the success rate of trading. Dual-period trading can provide you with a very good balance between the difficulty and stability of trade execution.