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.