Understanding Multiple Time Frame Analysis (MTFA)_6. Using Short-term Time Frames

Lesson 6: Using Short-term Time Frames

There are particular trades that need to be executed on the short-term frame.
The more recognizable the smaller declines become, the simpler it gets for the trader
to choose a promising entry for a position whose path has already been determined
by higher time frame charts. One more thing to keep in mind for this time frame is
that fundamentals again has a huge impact on price action in these charts, but not
like the way they affect higher periods. Here, fundamental trends can no longer be
seen when charts are lower than a 4-hour frequency. An increased in volatility will
instead materialize in the short-term time frame in response to indicators regarded
as market moving.

The smaller this time frame is, the bigger the effect on economic indicators
will look. Typically those sharp movements are short-lived which are sometimes
referred to as noise. Be that as it may, traders tend to not gamble on these fleeting
imbalances, as they track the development of other time frames.