How to use multiple time frames in Elliott Wave trading?
Hey everyone!
💡 There are 3 time frames a trader needs to use; Overall analysis time frame, Trading and Entry time frame. For example, 1W is my overall analysis TF, I trade on 1D but I enter based on the 4H outlook. The more you go down to lower time frames, the clearer price action and wave counts will be hence you see most EW love to use 1H more than 4H - it's because of P.A. clarity!
Here's another example:
🎯 Overall analysis TF: 1D or 2D
🎯 Trading TF: 1H to 4H (4H preferred)
🎯 Entry TF: 15-45 minutes
There are 3 steps which we follow when we trade:
1. Chart analysis
2. Formulating a trading plan.
3. Managing a trade.
Time frames explained:
1. Overall analysis time frame:
🔔 Let's say you are anticipating a triangle and it is already in wave (C) of [4] on weekly (1W) time frame.
🔔 Odds are it will take at least 3 years say from 2024-2027 to finish.
You know that a triangle subdivides into a zigzag, double zigzag (and rarely a triple zigzag - mostly in over-leveraged markets especially softs and grains) and one wave subdivides into a triangle {especially wave (E)}.
🔔 First of all you don't want to take unicorns (triple zigzag and wave E triangle) in to consideration because they rarely occur.
🔔 If one wave say wave (B) was already a double zigzag you expect wave (C) to be a zigzag. That's the outlook here.
🔔 This phase is still you analyzing a chart. Use Elliott Wave counts, channeling techniques, candlesticks, bars, patterns, indicators etc.
2. Trading Time frame:
💪 You do internal wave count to confirm the outlook of a possible zigzag unfolding.
💪 Do further analysis using other forms of technical analysis to confirm your outlook.
💪 Look for alternate wave counts. Let the market play out, wait for confirmation, wave [i] and [ii] of A within (C) to complete, plan how you will enter, exit, scale in, take partial profit etc.
3. Entry time frame:
🎯 All the planning you did in step 2, copy it and do it on 4H so that you get better and early entries, less wider stops.
🎯 This time frame is really good for seeing wave subdivisions so that you will move your stops and manage your trades well.
🎯 Basically it's your trading time frame (1D) broken down so that you don't see the wave you are trading as 1 candlestick but with subdivision so that it is easy to preserve your capital.
I hope it makes sense now!