Those who have been struggling in the cryptocurrency market have probably experienced losses from focusing on a single timeframe—either being misled by short-term fluctuations or missing precise entry points. Today, I will clearly break down the multi-timeframe candlestick trading method that has been validated through practical experience. Master these three steps to transform from 'blindly following the trend' to trading 'with rationale and evidence.'
1. 4-hour candlestick: Determine the major long or short direction.
The 4-hour timeframe is the 'stabilizing force' for judging trends; a sufficiently long time span can filter out ineffective intraday fluctuations, allowing you to see the true intentions of the main players.
Upward trend: Highs and lows rise gradually like climbing stairs; each pullback is an opportunity to buy low, don't think about guessing the top to short.
Downward trend: Highs and lows continue to decrease; rebound is a good time to short, and bottom fishing will only lead to deeper losses.
Sideways consolidation: The price fluctuates back and forth within a fixed range; at this time, going long or short can easily lead to losses, so it is advisable to reduce the frequency of trades and patiently wait for a breakout direction.
Remember one thing: Trading in the direction of the major trend naturally increases your win rate; trading against the trend is like throwing money into a fire pit.
2. 1-hour candlestick: Delineate ranges to find key levels.
After determining the major direction, the 1-hour chart becomes a 'navigator' for finding specific entry and exit points.
When the price approaches trend lines, important moving averages (such as the 50-day, 100-day moving averages), and previous lows, these support levels are potential entry areas, especially when they align with the 4-hour trend.
When the price nears previous highs, important resistance levels, or forms top patterns like head and shoulders or double tops, you should prepare for profit taking or reducing positions in advance; don't wait for a pullback and then regret it.
When delineating ranges, be aware that a key level is not an exact point, but a range. For example, if the previous low is at $30,000, then any price between $29,500 and $30,000 can be considered a support area.
3. 15-minute candlestick: Determine entry timing (without considering the trend).
The role of the 15-minute timeframe is singular: to find precise entry timing; do not use it to judge trends.
When the price reaches a key position determined on the 1-hour chart, wait for a reversal signal on the 15-minute chart before entering, such as a bullish engulfing, bottom divergence, or MACD golden cross.
When breaking through key levels, always pay attention to trading volume. A volume increase during a breakout indicates that funds are following in, which is highly credible; a low-volume breakout is likely a false move and can easily lead to being trapped at high levels.
Short timeframes fluctuate rapidly; before entering a position, always think about 'what if I'm wrong,' and don't let one mistake disrupt your overall rhythm.
Multi-timeframe cooperation:
First, look at the 4-hour chart to determine whether to go long, short, or observe.
Switch to the 1-hour chart, mark out support or resistance areas, and determine the general entry range.
Open the 15-minute chart, wait for reversal signals and volume confirmation, and complete the final entry action.
Here are a few key reminders:
If the directions of the 4-hour, 1-hour, and 15-minute time frames are inconsistent, it is better to stay out of the market and observe rather than forcing a trade; the market does not lack opportunities, but lacks patience.
In the 15-minute or smaller timeframes, fluctuations are intense; when entering a position, always set a stop loss. The stop loss can be set on the opposite side of a key level, for example, below the support level when going long to prevent being stopped out repeatedly.
Following the trend is the premise, position is the foundation, timing is key; a good combination of the three is much better than blindly guessing while staring at the screen.
This multi-timeframe candlestick trading method, which I have used for over two years, has transformed my trading from frequent losses to stable profits, relying on this logic. Whether you can use it well does not depend on talent, but on spending more time daily to analyze charts and summarize patterns. There are no foolproof secrets in the cryptocurrency market, but finding the right method can help you avoid many detours.