What's up traders? In today's video lesson I'm going to be showing you how to perform multi-time frame analysis using a systemized and simplified approach. So stay tuned. Now today's video lesson is Lesson number four in our little mini-series that we've got going. It's a follow-up on the how to improve your win rate video that I posted about three weeks ago.
If you haven't watched any of the previous three lessons, I do suggest that you get over to the channel and watch those. You can find them all linked in this particular playlist. A lot of the information that we shared in those videos kind of accumulates and builds up every single video and in today's video lesson we're going to be using a lot of those concepts as well. when we perform a little bit of a technical analysis on GBPUSD.
So I highly suggest that you guys head over to the channel and watch that. All right. Now, as always, we're going to start off with some theory. Just give you guys a few explanations, some concepts, and then we're going to dive into the charts, use that bar replay tool, and then apply all of that theory in a practical setting so that you have some actionable takeaways from this video. All right.
Now, multi-time frame analysis. literally refers to the act of performing technical analysis on multiple time frames. The reason we do this is because we want to first of all establish what our higher time frame narrative is.
So we want to establish whether we are bullish, whether we are bearish, or whether we're in a phase of consolidation. And then after we have established that higher time frame narrative, what we then want to do is we want to identify higher probability zones, high probability setups on our lower time frames that will allow us to get involved in trades that are in line with that higher time frame narrative. Okay, that's essentially what multi-time frame analysis is. Now, depending on the type of trader you are, your higher time frame and your lower time frames might differ from mine.
So me personally, I do do a bit of swing trading, but for the most part, I am an intraday trader. And what that means is I am mainly looking for opportunities in the markets during the course of a trading session to get involved in and to exit. All right.
Now, I am able to do this with a eight to five job because of the understanding I have on multi time frame analysis. All right. Now, my higher time frames are the daily and the four hour. OK.
How I use those two charts is how I use those two time frames. My daily chart I will only look at when I do my pre-week market forecast, right? My four-hour time frame is one that I will look at every single day, especially when performing my end-of-day markups and at the start of my trading day. I will always look at my four-hour chart to establish what the trend is there because I want to follow my four-hour chart very closely, all right? I do sometimes use the one hour.
just as a time frame to help refine what I might be seeing on the four hour. But for the most part, my four hour is my main higher time frame when trading during the week. And then my lower time frames is the 15 minute.
The 15 minute is where I execute most of my trades. And then my one minute is just going to be a time frame that I like going to just to refine whatever I'm seeing on the 15 minute. All right. Now, if you are a swing trader, for example. Your higher time frames could be the daily and the weekly.
So you could be following your daily closely. So if you're a swing trader, your daily could be like my four hour. And then you can utilize the four hour and potentially even the one hour as your lower time frame.
Right. Because it's all about context. It's all about the type of trader you are and the style of your trading. Now. Because we are performing technical analysis on multiple time frames, it is important to understand the relationship that exists between higher time frames and lower time frames.
Okay. Now, in order to explain that relationship, I want to speak very quickly on the following concept. Now, some of you might be familiar with this particular concept. Some of you might not be, but it is the Elliott Wave Principle.
Now, this is one of the oldest theories that exist in the trading industry. All right. And essentially what the Elliott Wave Principle states is that the market is made up of a series of impulses and corrections.
OK, the market is made up of a series of impulses and corrections together. These impulses and corrections form trends, right? Now, how they do that is your impulses are known as drivers of price, drivers of the market.
And then your corrections just offer periods of relief when price is being driven in one direction or another, right? Because think of it this way. Price action never just goes in one direction. Price action never just goes up.
price action never just goes down. Whenever we have a sustained period of bullish pressure, there will be some bearish relief before price action continues with the underlying bullish trend. And then obviously, inversely, whenever we have sustained periods of bearish pressure, there will be some bullish corrections to relieve some of this bearish pressure before price action continues down.
And that's essentially what impulses and corrections are. All right. They are the drivers of the market. They form together to or they come together rather to form trends.
All right. Now, if we are defining what an impulse is, an impulse is price action that consists of five waves. And this is essentially what an impulse looks like. You basically have wave one, two, three, four. Five.
And that is what's known as a complete impulsive wave. That would be an impulsive, a bullish impulsive wave to the upside. And then a correction is price action that consists of three waves in the opposite direction. So if we are looking at a bullish market, our bullish impulse would consist of five waves to the upside. And then our correction or our corrective, our corrective phase.
will consist of three waves in the opposite direction. So one, two, three. All right.
Now, in order to explain it better, I want you guys to think of it this way. Okay. We have a very quick markup here and we can all agree that up until this particular point, price action is bullish.
And after this particular point, price action is bearish. All right. Now, when we talk about impulses, impulses, Impulses drive price. They drive the market. So if we look at this particular point in here as our starting point, and let's just say for argument's sake that at this particular point, price is 60 cents, right?
We have this price action here that takes price up towards this point. And at this point now, price is $2.50. So you can see that we went from 60 cents to $2.50, which means that we have just experienced an impulsive leg. Okay. After price action puts in this.
New high essentially at $2.50. We have a period of relief that brings price down to $1.98. So what we have now just experienced here is a period of correction or period of corrective price action. Essentially relieving this bullishness and it has brought price down to $1.98. So the way I...
like to think of impulses and corrections when we are looking at a bullish phase in the market is your impulses increase price okay and your corrections decrease price does that make sense so you'll see that our next leg is going to be a nice impulse because it takes price from $1.98 to $4.35 so what we have just experienced here again oops you What we have just experienced again is an impulsive leg to the upside because it has driven price a bit higher. What follows? We have a period of correction, a period of relief that now brings price down to $2.05. So in here, we now have a correction. It won't always be three waves up or five waves up and three waves down.
But that is essentially how I like to um think of impulses and corrections and if we just complete it here you'll see that we go from two dollars and five cents up to nine dollars and sixty eight cents we come down to seven dollars fourteen cents until we eventually hit a peak at thirteen dollars and thirty nine so within this bullish price action you can see our impulses pushing price higher now when we are in a period of bearish pressure when we are pushing price downwards All right. Your impulse now becomes the inverse. So your impulse now becomes the price action that pushes price down. So we now go from $13.39 and we push down towards $8.89.
So this particular leg would now be referred to as a bearish impulsive leg. All right. It's very, very important that you guys just grasp what an impulse and what a correction is.
OK, now. What you'll notice is if you've watched some of our previous videos, what you've essentially noticed is that we have created a basic supply and demand schematic here where we have a valid break of structure that forms a new external high swing point. We have a period of consolidation or a period of correction that takes out some liquidity. Price action comes into demand. before pushing price higher to form another valid break of structure to the upside.
All right. Does that make sense? So if we apply the Elliott Wave principle and if we apply impulses and corrections to smart money concepts and to supply and demand trading, we can see that our impulses and our corrections essentially help us denote our external structure points.
because you can see that in here we are putting in higher highs all right and we are putting in higher lows so in here we would essentially be looking for high value areas to get involved to push the price higher okay now as you can see when we put our impulses and our corrections together essentially directly utilizing the elliott wave schematic what we can see is that we have a period of impulse followed by a period of correction and then another period of impulse followed by another period of correction and in that way when we put these impulses and corrections together we have what is known as a trend okay now the reason the Elliott wave explains and helps us understand how the relationship between higher time frames and lower time frames work is because If you pay attention to your impulsive wave, okay, you'll see that within your impulsive wave, you've also got periods of correction. All right, do you see that? So this is what we can refer to as internal structure of this particular push to the upside all right i want you guys to stay with me here i'll say that again if this is our starting point and this is our higher high we have a push to the upside that's an impulse okay remember we went from a dollar and 60 cents here and we pushed up to two dollars and 50 cents okay so after putting in new high at $2.50 price action pulls back towards $1.98 okay now if we continue with that analogy we can see that we have a new high that would be obviously up here at the end of the next impulse okay and once we join those swing points we can see that we have essentially now created external structure Okay, so in my market forecast videos, I like talking about external structure and internal structure.
So what we have just done is we've seen that an impulsive wave that consists of an impulsive leg that consists of five waves has pushed price from $1.60 to $2.50. Within that impulsive move, we have five waves to the upside. And those five waves have...
periods of correction. So think of it this way. From $1.60 to $2.50 is external structure.
And we could say that that's the daily. Our five waves within that impulse could be seen as the four hour. All right.
I would actually like to denote it for you guys in this manner. So think of it this way. And we just change the color here quickly.
Think of it this way. The red represents our daily. And then the blue represents our 4-hour. Okay. Then we have a correction that pushes price down from $2.50 to $1.98.
This is bearish relief of this bullish daily impulse. Within that, we've got 4-hour structure. So, from... a smart money trading point of view what we are looking for is we are looking for a demand zone in here okay that obviously sits within that will sit within discount or premium prices so there's my 50 that sits within discount or premium prices to then allow us a higher probability area to continue with the underlying Trend to the upside.
That's essentially what we're trying to do. Okay, if I bring it back to our impulse and correction Schematic here essentially what we have is is we have a break of structure to the upside here Okay, this is a valid break of structure up. It meets our rules After that break of structure to the upside we have a new external higher high that is formed after that higher high forms what can we anticipate we can anticipate a pullback okay so once we have this break of structure we have now confirmed that this is our new leg okay which means that we are now playing within this particular leg within that particular leg because we are bullish we've just broken structure to the upside what we can anticipate is we can anticipate this particular high to go because it is now a week it's classified as a weak high so all we then do is we then bring on our fib tool and then we look for price to pull down into discount prices okay in order for us to continue with that underlying bullish trend that was essentially confirmed here by this break of structure does that make sense so you'll see that obviously within here we might have um a four hour demand or a 15 minute um demand zone in there that we want to look at this would obviously be some liquidity in here okay and then after price action taps into our level into our demand we can comfortably put on our buy limit orders let's say we cover this low and then we can aim for at least the weak high up here to continue with that underlying trend to the upside all right and that is essentially what we are looking for all right we're looking to identify our external structure which is our impulsive moves that drive price okay and within that inter within that external structure we know that there is internal structure on our lower time frames and it is those internal structures that will allow us to find high probability zones to continue with that underlying trend.
Okay, so you can see that obviously, after price action changes trend here and goes into a bearish state, we have a nice break of structure to the downside, we have a valid supply zone that forms now. And then within this particular supply zone, after a period of correction, price action continues down, right. And that's basically all multi timeframe analysis is.
So I hope this was clear. I want to I want to go over to the charts now and apply this knowledge in a practical setting. All right. So we're going to perform just a little bit of technical analysis here on GBPUSD. Now, what I want to do is we can we can throw on the bar replay tool.
Let's let's say we take price back to round about here. Let's just say that we take price back to here. Now, if we zoom out here very quickly, you can see that we basically went from a state of bullishness until we got this trend change in here. And then price action started to turn bearish from here, right?
Basically, from this point, price action started pushing bearish. So if we zoom in now, and this is the daily chart, let's just say, for example, that this is Sunday, we're performing market forecast whenever you do your market forecast for the week. We're on the daily chart. We're going to start performing our analysis.
The first thing you want to do is you want to mark out your external structure swing points. So essentially on the daily, you basically want to be looking for the major turning points of price. OK, so essentially what price action is doing is we're going from high to low. We're doing this right. And the whole time we are breaking to the downside.
okay so we can clearly see that here price action is bearish a little quick tip for you guys if you do struggle to map out your external structure swing points what you can do is just for a bit of practice is you can throw on your line tool all right and then you can just mark out your major turning points in price okay and you'll see that once you've marked out those major turning points once you bring back your candlestick chart that those are more or less going to be your more dependable external structure swing points. So we can clearly see that we are bearish. Our external structure on the daily chart is suggesting that and we've obviously got these nice breaks of structure to the downside in here.
So this is our first one. This is going to be our second one in here. And then what we now have seen is at this particular point, After price action breaks to the downside here is that we have this particular leg that we're playing within.
All right. So more on that in a bit. After you map out your external structure, basically what you want to do is you want to go ahead and you want to look for any supply or demand zones that have either been mitigated or that have not been mitigated yet. So we can see that price action is bearish here on the daily. OK, we have marked out significant.
Supply zones that have formed a chain. Okay, we have our valid breaks of structure to the downside showing us that we are in that bearish trend. And what we have now done is we have just formed a new low.
Okay. Now what this has done is this has given us and confirmed our daily leg in here. So you can see that we've come from this high, we've broken structure, given us a confirmed low.
and we are now playing within this leg okay now what does that mean well that means that this is referred to as a strong high realistically price action won't violate this high if price is to remain bearish okay but it would violate this low okay because think of it this way this particular high has done its job it has created a new low okay in here if price action fails to break above here this particular low would have failed to do its job it would have failed to create a new high therefore from this particular point we can anticipate price action to violate this all right now after we identified our most recent daily leg what we do is we go ahead and we mark out our discount and premium pricing. So you basically go from swing high from swing low. Remember, we've spoken about this in our how to improve your win rate video.
Now, you can see that our equilibrium point is the 50%. What that means is everything below is going to be regarded as discount pricing, and everything above is going to be regarded as premium pricing. So in order for us to continue with this underlying daily trend, what we would like to see is we would like to see price action pull back into our premium pricing, mitigate something and then roll over.
All right. Now, going back to what we're speaking about when we're talking about impulses and corrections, notice how this is going to be referred to as a bearish impulse because we go from What's this? 1.425 and we drop to 1.357.
So notice how this period of price action has taken price from a higher price to a lower price. So that is now a bearish impulse. And then we've got this price action here offering up a little bit of relief. So we then go from 1.357 and we pull back. towards 1398 so this is now regarded as our bearish correction okay so here we have a very strong bearish impulsive leg to the downside that's the leg that we're playing in we can now anticipate potential bullish reversals so let's just say for example that this is sunday or saturday whenever it is like we said and we are performing our market analysis so once we mark out this high Once we mark out this low, we want to go ahead and we want to mark out any supply or demand zones that exist within this lake.
Okay, the reason we do this is because we want to identify areas that we could potentially be seeing reversals from. Okay, so we've got this particular daily supply in here. Okay, you can see that I would I would say that this particular zone has already been mitigated in here.
Okay. it's very very very light mitigation but it looks like it has been mitigated and then you can essentially drag this one to here okay so i would if i would be true if i were trading live i would basically put more importance on this particular zone than i would on this particular zone okay we can also see that this zone is significant because we had price action come into demand we had a really nice strong mitigation a really nice strong reaction price action pushed up but then this supply area caused this demand to fail so this is now a really nice level for us to potentially look for price action to pull back towards and then continue lower not only is it significant because of the fact that it led to the violation of this demand but you can see that it also sits within our premium pricing okay Another daily level that you can also mark out would be this area in here Okay. Now I think it's important that you don't draw on too many Supply and demand zones on your charts because you can get Information overload. All right, and this is where back testing will help you I know personally that GBP USD likes to pull back a little bit deeper into your premium price or your discount price before continuing with that underlying trend so even though this is nicely positioned we really could see price action pull back towards here purely because gbp usd tends to pull back a little bit deeper all right we've now marked out our daily time frame we've identified those high probability areas from a daily point of view where we would like to see those continuations to the downside what we now do is we drop down to the four hour and then we have a look at what price action is doing so if we zoom in you can see that we have already or i have already marked out that four hour structure here as price action is continuing to the downside okay so basically from a four hour point of view that you can see that you have these higher highs and you've got these higher lows now what i want to see is because we have right because we have just created a new structure low in here what i want to see is i want to see now my four hour turn bullish okay why because remember we are sitting within discount pricing of that daily leg so what i want to see is i want to see my four hour turn bullish and then i know that for the entirety of this particular zone i am just looking for buying opportunities now from a four hour point of view what we can see is that if we just focus in on this particular break what we can see is that price action push down we had a break of structure here and then another break of structure in here and then what price action did is price action gave us this first initial indication that you know what it's probably ready to trend or to change trend in here okay now one thing i want you to notice is that we actually have we actually have a four hour change of character that takes place here So this is my four hour chalk. And again, if you haven't watched the video on how to identify change of character, make sure you head over to the channel and watch that how to identify chalk video.
But essentially down here, we've got four hour change of character. Now, our four hour change of character, realistically, from my point of view, my four hour change of character is really only confirmed after price action goes ahead. and sweeps this particular high okay obviously between this high and this low we do have price action pushing down but it is not for our structure all right between this four hour high and this so let me actually change the color um to represent the four hour there we go so between this particular high and this particular low There is structure, yes, but that is internal structure.
That's one hour and that's 15 minute structure. My four hour change of character for me personally is only truly confirmed or that trend change is only truly confirmed after price action goes ahead and wicks this particular high. All right. So after we wick this particular high, what do we see price action do? We see price action pull back rather aggressively.
after a week that high and where is that price action coming towards well we can identify this large four hour week as a potential for our demand zone that price action could potentially pull back towards okay so what we can now see is our daily chart so if we just drop back out okay what we can see is our daily chart has just formed a new low and we are with in discount pricing so we can anticipate a bullish daily pullback all right we can anticipate a bullish daily pullback on my four hour chart i have just seen a four hour change of character which obviously confirms this particular low okay and after that four hour change of character has occurred we have just seen a previous external structure high on the four hour we have just seen that wick and now price action is pulling down towards a potential four hour demand zone okay now we obviously like this particular demand zone why do we like this particular demand zone because it has seemingly come off of you know something a bit more significant on your lower time frames in here okay so what we would like to see now from a four hour point of view is we would like to see price action potentially pull back in towards here Then continue with that daily pullback. Okay continue with that daily bullish pullback continue with this daily Trend change as well. So after I identify This particular scenario and identify this for our demand.
What I then do is I So what you can do is you can go down to your one hour and you can see whether or not There is any refinement that can be done, right? You can look for any potential refinements potentially in this week potentially somewhere up here but then what i like to do is i like to go down to my 15 minute and i then like to monitor price action and i want to see can price action pull back into here and can we get a reaction so if we play price forward now remember we are on the 15 minute chart we'll see the price action we actually just increase the speed of it here we can see the price action As anticipated, price action comes into this four hour demand zone. All right. So now that we have come into this four hour demand zone on the 15 minute, what am I anticipating? I am waiting for my 15 minute now to also give us a potential change of character within this level to then potentially push up.
All right. If we quickly, if we very quickly mark out our 15 minute. external structure essentially so you've got this particular high up there okay you can see that we've had this low so price action is essentially doing that um and then you've had this you've essentially had price action sweep this but this is the four hour or this is the 15 minute leg that we're playing within because of this break of structure right so from a 15 minute swing structure point of view we've got a break of structure in here right because we have that which means that this is the 15 minute that we are playing within now So, although this has been bearish on the 15 minute, what are we anticipating? We are anticipating this particular high to go.
Why? Because this is what we class as a weak high. It's a weak high because if this zone holds, it would have failed to do its job. It would have failed to form a new low below here. This is regarded as a strong low because it broke structure.
it led to a new high so what we want to see is we want to see something in here to potentially take price out here okay so if we now zoom in on our 15 minute we just keep an eye on it all right we want to see a potential 15 minute change of character down here and then we can look to get involved in the market so you can see price action drops even deeper Into our zone into our four hour zone. It has come into this particular week So you could do some refinement here on your 15 minute. Let's see if the zone holds it it could break down Alright, what we then see is we see price push all the way down to our zone and at this point We could now start looking at potentially right?
We could now start looking at potentially looking for one minute change of character down here But we want to keep it a little bit simple. So we could mark this out as our 15 minute change of character in here, you've got a 15 minute change of character here. Okay, now where did that 15 minute change of character originate from, I would say that that 15 minute change of character came from this particular week in here.
So we mark that out as 15 minute, okay. And then all we want to do is Remember, we're targeting this particular high. So all we want to do is now, after this particular 15-minute change of character, we can then start looking for buying opportunities.
So if we play price forward a little bit here, we can see that we have a nice push to the upside. We then create a new high. Where does price action pull down towards?
Let's have a look. Does it come back to this particular 15-minute zone? Probably not.
Let's keep an eye on it. We push down a little bit lower. we can see that price action interacts with a 15 minute level in here all right so this could be just some inducement before price actually pushes down a little bit lower let's keep an eye on it so obviously at this particular point what you can do is right if you are really in tune with the markets you could bring on your fib tool and you could say that all right of this particular 15 minute leg after we've seen that change of character we are looking for buys down here so this area would be nice this area would be nice as well we don't want to look for any buys up here okay so if we continue playing price action forward we can see that yes indeed this has acted as just a little bit of inducement price action takes some liquidity down there will it push down even lower remember this is now our asian session let's keep an eye on it let's actually increase the speed of this so here we go so price action ends up mitigating here right we end up mitigating this level here we have a little bit of a sweep but we now can see a confirmed 15 minute trend change up here okay so you could actually mark this out as minor break of structure but what i like to do is After seeing the 15 minute change of character, we have seen the 15 minute break of structure to the upside. So what that now means is, all right, what that now means is if we go to the daily chart really quickly, it means that our daily has started a bullish pullback.
OK, so we are essentially we essentially have a long bias on our daily. All right. Our four hour. Our 4 hour has just mitigated a demand zone, which means that we can anticipate this particular high to go.
So our 4 hour is bullish as well. And then we have now just seen a 15 minute break of structure to the upside, which means that after this 15 minute change of character and this break of structure, our 15 minute is also bullish. So now what we see is, is that we see our daily, we see our four hour, okay, and we see our 15. All of them are pointing bullish.
So what we can do is we can start looking for buyers, and we can start buying crazy. Okay, so from a 15 minute, obviously, you need to notice that there will be a wealth of opportunities between here and here, there will be a wealth of opportunities for you to get involved in the market. and if we just play price action forward here on a 15 minute chart or on the four hour chart you can see how we just absolutely explode from this particular four hour and i do want you guys to head onto your charts and back test this right perform your analysis on your daily drop down to your four hour or your one hour whatever your your time frames are and apply these concepts because these things are extremely powerful especially if you time them correctly if we play price action for it you can see that all below here we are just buying right we're not looking for any cells yes you will have some nice intraday short opportunities right especially on your one minute but for the most part just look for cells okay now you can see the price action in here we get an initial um reaction from these two zones but price action continues to push deeper as it tends to do with GBPUSD until we get the mitigation in here on the daily. So once you come into here, it's the same thing.
All right. You're looking for price action on your 15 minute chart now. OK, because we have because we have not tapped into.
Let me just quickly jump back out here and let me pull back price to around about there. Once we drop down to the 15 minute, all we're looking for is we're looking for a 15 minute change of character. And it actually looks like we have a nice 15 minute change of character in here. You're just looking for a 15 minute change of character within a four hour or a daily zone.
And then you want to look for all time frames to be in alignment. So we have a 15 minute level here. And then from there, you want to see whether or not price action is going to continue down lower.
Right. So we do have. Now notice here, right, you do have price action push a little bit higher, but we never take out these highs.
So our change of character is still confirmed. You then have a 15 minute break of structure in here. OK, which means that you can then look for potentially this level here. And then all you're doing is you're telling yourself that, all right, we've just seen a if my charts load up, we've just seen a daily mitigation in here.
So we can anticipate now price action to continue bearish because we've had that mitigation. This is a strong high. Okay. We've seen that four hour or we've seen that daily mitigation.
We have also seen the four hour come in to this particular daily level. So you have the four hour coming into that daily level as well. We get that mitigation.
And then you've got a 15 minute change of character within that level. which means that now our daily, our four hour and our 50 minute are all pointing bearish. They are all in alignment. What we can then start to do is we can then start to look for potential selling opportunities. And you can see that.
All right, cool. Price action again pushes up a little bit more. Now, this is a characteristic of the Asian session.
You can see that our mitigation occurs within the Asian session. So you can anticipate a push a bit higher. And then price action after we get that. What do we do?
we absolutely fall off a cliff here okay and it's it it's that simple so if you guys enjoyed this video if you guys found some value in it please hit that like button don't forget to subscribe to the channel so you don't miss out on any future content i appreciate you guys so much for watching and i'll see you in the next one