Why look at 4-hour, 1-hour, and 15-minute candlesticks?
Many people in the cryptocurrency space repeatedly fall into pitfalls because they focus on only one timeframe.
Today, I will discuss my commonly used multi-timeframe candlestick trading method, which involves three simple steps: grasping direction, finding entry points, and timing.
1. 4-hour candlestick: Determines your major direction for going long or short
This timeframe is long enough to filter out short-term noise and clearly see the trend:
• Uptrend: Higher highs and higher lows → Buy on dips
• Downtrend: Lower highs and lower lows → Sell on rebounds
• Sideways consolidation: Price fluctuates within a range, making it easy to get stopped out; frequent trading is not recommended.
Remember this: Trading with the trend increases your win rate; trading against it will only cost you.
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:
• Positions near trend lines, moving averages, or previous lows are potential entry points.
• As you approach previous highs, significant resistance, or a topping pattern, consider taking profits or reducing your position.
3. 15-minute candlestick: Only for the final “trigger action”
This timeframe is specifically for finding entry timing, not for analyzing trends:
• Wait for key price levels to show small timeframe reversal signals (engulfing, bullish divergence, golden cross) before entering.
• Volume must increase; a breakout is only reliable with good volume; otherwise, it may be a false move.
How to coordinate multiple timeframes?
1. First define the direction: Use the 4-hour chart to decide whether to go long or short.
2. Find the entry zone: Use the 1-hour chart to identify support or resistance areas.
3. Enter precisely: Use the 15-minute chart to find the final trigger signals.
A few additional points:
• If there are conflicting directions across several timeframes, it’s better to stay on the sidelines and not take uncertain trades.
• Small timeframe fluctuations are quick; always use stop-losses to prevent getting repeatedly stopped out.
• A good combination of trend, position, and timing is far superior to blindly guessing while staring at the charts.
I have used this multi-timeframe candlestick method for over 2 years; it is the foundation of my consistent trading setup. Whether you can use it well depends on your willingness to analyze charts and summarize your insights.
