Why observe 4-hour, 1-hour, and 15-minute candlesticks?
Many people in the cryptocurrency space repeatedly fall into pitfalls due to focusing on only one time frame.
Today, I will discuss my commonly used multi-timeframe candlestick trading method, which consists of three simple steps: grasping the direction, finding entry points, and timing the market.
1. 4-hour candlestick: Determines the overall direction of your long or short position.
This time frame is long enough to filter out short-term noise and clearly see the trend:
• Uptrend: Higher highs, higher lows → Buy on dips
• Downtrend: Lower highs, lower lows → Short on rebounds
• Sideways fluctuation: Prices oscillate within a range, making it easy to get whipsawed; frequent trading is not recommended.
Remember this: Trading with the trend increases your win rate; trading against it only gives away money.
2. 1-hour candlestick: Used to delineate ranges and find key levels.
Once the major trend is established, the 1-hour chart can help you identify support/resistance:
• Approaching trend lines, moving averages, previous lows, etc., are potential entry points.
• If approaching previous highs, significant resistance, or top patterns appear, consider taking profits or reducing positions.
3. 15-minute candlestick: Only used for the final 'trigger action'.
This timeframe is specifically for finding entry opportunities, not for trend observation:
• Wait for key price levels to show small cycle reversal signals (engulfing, bullish divergence, golden cross) before entering.
• Volume needs to increase; breakouts are only reliable then; otherwise, it can easily lead to false moves.
How to coordinate multiple timeframes?
1. First, determine the direction: Use the 4-hour chart to decide whether to go long or short.
2. Find entry zones: Use the 1-hour chart to identify support or resistance areas.
3. Precise entry: Use the 15-minute chart to find signals for the final entry.
A few additional points:
• If there is a conflict in direction across several timeframes, it's better to stay out of the market and not take uncertain trades.
• Smaller timeframes have fast fluctuations; always use stop-losses to prevent repeated hits.
• Combining trend, position, and timing effectively is far superior to mindlessly guessing while staring at the charts.
This multi-timeframe candlestick method is a foundational strategy I often use, and I'm sharing it with everyone now. Whether you can utilize it well depends on your willingness to analyze charts and summarize your findings.