Multi-Timeframe Strategy

Professional traders often use multiple timeframes: a higher timeframe for trend direction and a lower timeframe for precise entries.

The Concept

Higher timeframe (1D): Determines trend direction — only trade in the direction of the daily trend.

Lower timeframe (4h): Times entries — enter on pullbacks within the larger trend.

The idea: align with the bigger picture while optimizing entry timing.

Strategy Setup

Data Sources

Daily data for trend:

4-hour data for entries:

Analysis Block: daily_trend

Analyze the higher timeframe:

ema_50: EMA(btc_1d.close, 50)
ema_200: EMA(btc_1d.close, 200)
uptrend: ema_50 > ema_200
downtrend: ema_50 < ema_200
trend_strength: ADX(btc_1d.high, btc_1d.low, btc_1d.close, 14)
strong_trend: trend_strength > 25

Analysis Block: entry_signals

Lower timeframe entry logic:

rsi: RSI(btc_4h.close, 14)
pullback_buy: rsi < 40 AND rsi > rsi[1]
pullback_sell: rsi > 60 AND rsi < rsi[1]
fast_ema: EMA(btc_4h.close, 9)
slow_ema: EMA(btc_4h.close, 21)
momentum_up: fast_ema > slow_ema
momentum_down: fast_ema < slow_ema

Analysis Block: combined

Combine timeframes:

long_setup: daily_trend.uptrend AND daily_trend.strong_trend AND entry_signals.pullback_buy AND entry_signals.momentum_up
short_setup: daily_trend.downtrend AND daily_trend.strong_trend AND entry_signals.pullback_sell AND entry_signals.momentum_down

Entry Rules

Long Entry:

Short Entry:

Risk Management

Stop Loss:

ATR(btc_4h.high, btc_4h.low, btc_4h.close, 14) * 2

Take Profit:

Move Stop to Breakeven:

Strategy Logic Explained

Why Multiple Timeframes?

1. Reduces noise — Daily trend filters out 4h false signals
2. Better timing — 4h provides precise entries within daily trend
3. Higher probability — Trading with the trend, not against it
4. Clear invalidation — If daily trend changes, strategy adapts

Entry Conditions

For a long entry, we need:

1. Daily EMAs show uptrend (50 > 200)
2. Daily ADX > 25 (strong trend)
3. 4h RSI pulled back and turning up
4. 4h EMAs confirm momentum

This is a high-bar entry that waits for alignment.

Risk Management

• ATR-based stop adapts to current volatility
• 3R target ensures good risk-reward
• Move to breakeven after 1R to protect capital

Variations

Add Volume Confirmation

volume_expansion: btc_4h.volume > SMA(btc_4h.volume, 20) * 1.3
long_setup: daily_trend.uptrend AND entry_signals.pullback_buy AND volume_expansion

Weekly + Daily + 4h

Add a weekly timeframe for the major trend:

btc_1w: BTC-USD weekly

major_uptrend: EMA(btc_1w.close, 10) > EMA(btc_1w.close, 30)

Then require major_uptrend AND daily_trend.uptrend for longs.

Divergence Detection

Add RSI divergence on the daily:

price_higher_high: btc_1d.high > HIGHEST(btc_1d.high[1], 10)
rsi_lower_high: daily_trend.rsi < HIGHEST(daily_trend.rsi[1], 10)
bearish_divergence: price_higher_high AND rsi_lower_high

Timeframe Selection

Common combinations:

Rule of thumb: Lower timeframe should be 3-6x smaller than higher timeframe.

Backtest Considerations

Multi-timeframe strategies typically show:

Fewer trades but higher quality setups.

Tips

1. Be patient — Multi-timeframe setups are rare but valuable
2. Trust the higher timeframe — Don't override daily signals with 4h noise
3. Use the lower TF for timing only — Direction comes from higher TF
4. Watch for timeframe conflicts — When they disagree, stay out
5. Consider correlation — If trading multiple pairs, check they're not all the same setup