There are many ways to use time frame confluence, but we stick with timeframes that are more widely used.
We use the following timeframes; Monthly, Weekly, Daily and the 4h.
We look for setups on 3 main timeframes. The daily, the weekly, and the monthly.
The 4h chart is an exception. We use it to enter trades, but we never look for setups on it. More about that in our entry section.
Lesson 4.1: Spotting a setup on the daily timeframe
If we spot a setup on the daily timeframe, we use two time frames to confirm our confluence.
One higher and one lower timeframe. The lower timeframe that we use is the 4h timeframe. And the higher timeframe that we use is the weekly timeframe.
Lesson 4.2: Spotting a setup on the weekly timeframe
If we spot a setup on the weekly timeframe, we use 3 time frames to confirm our timeframe confluence.
We use one higher timeframe, which is the monthly time frame. And we use two lower timeframes, which are the daily and the 4h timeframes.
Lesson 4.3: Spotting a setup on the monthly time frame
If we spot a setup on the monthly time frame, we also use 3 timeframes to confirm our timeframe confluence.
This time we only use lower time frames as there is no useful higher timeframe. We use the weekly, the daily and the 4h timeframe.
Our rule for looking at a higher timeframe from the main one is that the timeframe isn’t showing us price action opposite of the direction we want to trade in. Meaning the price action can either show us the same bias as the main timeframe or it can show us a ‘’neutral’’ bias. Neutra bias means that the price isn’t showing us bearish nor bullish price action.
When we are looking at lower time frames, we always want the price action to show us the same directional bias.