Having been in the crypto space for a long time, I have seen too many people stubbornly stick to a single time frame candlestick chart and get repeatedly taught a lesson by the market. Today, I will share an effective 'Multi-Timeframe Candlestick Trading Method' in three steps to clarify trends, pinpoint levels, and seize the right timing, making it easy for beginners to get started!
1. 4-Hour Candlestick: The 'Navigation System' for Determining Direction
The 4-hour candlestick is the core for judging the major trend; it filters out intraday noise, making the direction clearer, just like navigation while driving—
- Uptrend: Higher highs and higher lows, pullbacks are buying opportunities, go long in the direction of the trend;
- Downtrend: Lower highs and lower lows, rebounds are mostly false signals, prioritize finding shorting opportunities;
- Sideways Consolidation: Prices fluctuate back and forth within a range, frequent trading during this time is equivalent to paying unnecessary fees, it is advisable to observe.
Remember: Follow the trend to achieve significant gains; trading against the trend is like giving away money.
2. 1-Hour Candlestick: The 'Battle Map' for Finding Levels
After determining the major direction, the 1-hour candlestick helps you lock in specific entry areas, focusing on support and resistance levels—
- Trend lines, moving averages, and previous lows are strong support levels; when prices approach, a rebound may occur, serving as potential buying points;
- Previous highs and key resistance levels combined with top patterns (like double tops) are signals for taking profits or shorting.
This is equivalent to further narrowing down the battle range based on the 'correct major direction.'
3. 15-Minute Candlestick: The 'Scope' for Catching Opportunities
The 15-minute candlestick does not judge trends, but is used to accurately grasp entry timing, like a sniper waiting for the best moment to shoot—
- When the price reaches the support/resistance level on the 1-hour chart, observe if there are engulfing patterns, bottom/top divergences, golden/dead crosses, etc., on the 15-minute chart;
- Must be combined with trading volume! Breakouts without volume are mostly false signals; it is safer to act only after confirming with increased volume.
Multi-Timeframe Coordination Mnemonic
1. Determine Direction: Use the 4-hour chart to assess the trend and decide whether to go long or short;
2. Define Area: Use the 1-hour chart to find support and resistance, locking in the entry range;
3. Wait for Signals: Look for reversal signals and volume on the 15-minute chart, and act decisively.
Pitfall Reminders
- If there are conflicting directions across multiple timeframes (e.g., 4-hour up, 1-hour down), don't rush to act; stay in cash and wait for signals to align;
- Small timeframes fluctuate quickly, so be sure to set stop losses to avoid being swept out by short-term noise;
- Trend, levels, and timing are all essential; missing one could lead to losses.