MULTI-TIME FRAME ANALYSIS

ON EXCEL & ON
METASTOCK EXPERT
By Hitendra Vasudeo - hitendravasudeo.com

Objective of Multi-Time Frame analysis

Trade/Invest in Major Direction
Participate in lower degree once
major direction established: Look for
signals in lower degree

Basic Filtration

1)
2)
3)
4)
5)
6)

Trend
Volume
Open Interest
Candle & CP/LC Ratio
Price Gain/Loss
Fresh Signal/ Fresh Trend

Advance Filtration

Motion and Strength

1) ADX
2) RS

Slope Concept

Rate of Change- Representing Slope

Rate of Change of ADX
Rate of Change of RS
Rate of Change of DRV

Levels- Pivot Levels (Wilders RTS)

Execution
Pre Market Based on Pivots
Live Market:
Open/Close Strategy
Pivot Strategy

Trend
Trend identification based:
Subjective and Objective Analysis
We prefer Objective Analysis
Moving Average
Use Variable or Adaptive Moving
Average

Moving Average: Variable

Exponential moving average
Automatically adjusts
Smoothing percentage
Volatility of the data series
Sensitivity-current data.

Volume
Volume breakout
Gain Volume over previous
Day/Week/Month

Open Interest
Gain in OI preferred for Directional
Trades along with the trend, rise in
price and rise in volume

Candle & CP/LC Ratio

Candle categorized in Positive,
Negative and Indecisive
PC- Positive Candle- Close>open
NC- Negative Candle- Close<Open
Indecisive- Dojis, Smaller Body, Larger
Upper or Lower Shadow- Use CP/LC
Ratio

CP/LC Ratio
P- Positive- Close > (H+L+C)/3
N- Negative- Close < (H+L+C)/3
To be used in co-ordination with
Trend, Volume, OI and Candle
filtration

Price Gain/Loss
1 Day Price Gain or Loss
For Up Trend- Gain are considered

For Down Trend- Loss are considered

Fresh Signal/ Fresh Trend

Cross over Up of Close over Variable
Moving Average- Fresh Signal for buy
Cross Over Down of Close below
Variable Moving Average- Fresh
Signal for Sell

Fresh Signal/ Fresh Trend

Cross over Up of Low over Variable
Moving Average- Fresh Signal for buy
Cross Over Down of High below
Variable Moving Average- Fresh
Signal for Sell

Advance Filtration

Motion and Strength

ADX
ADX > 20 along with UP Trend,
Volume Increase, OI Increased,
Positive Candle, Positive-CP/LC Ratio
for Up Trend/Buy Sorting

Motion and Strength

ADX
ADX < 20 helps to identify sideways
movement or sluggish movement
along with the Variable Moving
Average which turn flat or horizontal
Sharing of VMA by high and low
considered Sideways

Motion and Strength

RS- Strength or Relative Strength (Not
RSI)
Stock Price/Nifty or SENSEX= RCS

Motion and Strength

Stock Price/Nifty or SENSEX or any
benchmark= RCS=RS
0-100 rating is required
We use RSI of RCS
Difference is normal RSI has close
considered where we consider ratio
RCS

Motion and Strength

Strength Increases: Stock Price
increases faster than Benchmark
Stock Price steady and Benchmark
falls
Stock Price falls less and Benchmark
falls faster

Motion and Strength

Strength Decreases: Stock Price falls
faster than Benchmark
Stock Price steady and Benchmark
rises
Stock Price rises slower than
Benchmark

Motion and Strength

RCS of RSI for 7 trading days
RCS of RSI for 7 weeks
RCS of RSI for 7 months

Rate of Change- Representing Slope

Rate of Change of ADX
In all up trend and down trend sorting
slope of ADX showing be rising on day
to day basis

Rate of Change- Representing Slope

Rate of Change of RS
Strength Should be rising in Up Trend
Strength Should be falling in Down
Trend

Rate of Change- Representing Slope

Rate of Change of DRV
The variable moving average- DRV
should be rising on day to day basis
for up trend sorting
The variable moving average- DRV
should be falling on day to day basis
for down trend sorting

Levels- Pivot Levels (Wilders RTS)

For Up Trend- Resistance or Book
Profit- L3-L4: Buy- CP- L2
For Down Trend- Support or Book
Profit- L2-L1: Sell- CP- L2

Execution
Pre Market Based on Pivots
For Up Trend Sorting:
Last C, CP, L2 = Buy
SL= Stop Loss- Previous Day Low
L3-L4= Book profits for the day
To Carry= Close > DRV

Execution
Pre Market Based on Pivots
For Down Trend Sorting:
Last C, CP, L3 = Sell
SL= Stop Loss- Previous Day High
L2-L1= Book profits for the day
To Carry= Close < DRV

Execution
Live Market:
Open/Close Strategy
Intra-day up trend= Price >Open
Intra-day down trend= Price <open

Execution
Live Market: Open/Close Strategy
On Pre Market Defined Buy- In Good
Market condition opportunities missed
because of gap up opening and
further rise

Execution
Live Market: Open/Close Strategy
In such situation open/close strategy
helps to revised stop loss
Price > Open and Price > P.Close
=Buy
Stop loss= L or P.Close whichever is
lower

Execution
Live Market: Open/Close Strategy
On Pre Market Defined Sell- In Weak
Market condition opportunities missed
because of gap down opening and
further slide

Execution
Live Market: Open/Close Strategy
In such situation open/close strategy
helps to revised stop loss
Price < Open and Price < P.Close =
Sell
Stop loss= H or P.Close whichever is
higher

Execution
Live Market: Open/Close Strategy
Live Market: Pivot Strategy
Both can be opposite
If Pre Market defined Strategy is to
Buy= Look for intra-day Strategy to
support the buy

Execution
Live Market: Open/Close Strategy
Live Market: Pivot Strategy
Both can be opposite
If Pre Market defined Strategy is to
Sell= Look for intra-day Strategy to
support the Sell

Execution
Live Market: Pivot Strategy
Objective is to Sell High and Buy Low

Execution
Live Market: Pivot Strategy
Open/Close = Buy Later Pivot
Strategy= Sell = Take profit on long
Open/Close= Sell Later Pivot
Strategy=Buy= Take profit on short

RISK MANAGEMENT
Know the Risk Associated with Pre
Market Buy or Sell
If risk is higher then avoid can pick
with lower Risk in order of Preference

Final Pick for Buy or Sell

RS- Relative Strength which defined
the order of preference
Along with
Risk Management

Multi Time Frame Analysis

Ideally all time frame= Daily, Weekly
and Monthly to be Up for selecting a
buy
Or
One Higher up Degree to be in Up
Trend

Multi Time Frame Analysis

If Monthly Trend is Up then look for
fresh Buy Signal in Weekly
Further if weekly trend is up then look
for fresh Buy Signal in Daily
Avoid Sell when up trends are defined
and wait for next buy opportunity
Example= Aurobindo Pharma

Multi Time Frame Analysis

If Monthly Trend is Down then look for
fresh Sell Signal in Weekly
Further if weekly trend is down then
look for fresh Sell Signal in Daily
Avoid Buy when down trends are
defined and wait for next Sell
opportunity

Multi Time Frame Analysis

Buy/Sell and Hold position in futures
can be made easy by doing multi
frame approach
Earning in futures trading can be
made easy

Technical Analysis is easier to

implement in Trended market
Therefore, a methodical approach
like Multi Time Frame to reduce the
risk of getting chopped in lower
degree trend

Thank you
For
Being Patient
Hitendra Vasudeo
Stockmehanics.com
Hitendravasudeo.com