Or you could mix it up and add the 50 period simple moving average from one timeframe, the 20 period Wilders Moving Average from another timeframe, and the 10 period Hull Moving Average from yet another timeframe, all on the same lower timeframe chart. You can add the 10-period EMA from the 5′, 10′, 15′, 30′, 60′, and 4-hour, etc., all on the same 2′ chart at the same time. Say you’re on a 2′ and like using the 10-period exponential MA on higher timeframes. It can also allow you to plot multiple timeframe moving averages on the same chart. I trade off the 20 SMA, but if you trade the 21, 25, 10, 50, or 8, this indicator can easily work for those as well. So to solve this dilemma and make life easier on myself, I eventually developed a study that allows me to add ANY higher timeframe MA to any lower timeframe chart. In order to make a higher timeframe SMA accurately show up on a lower timeframe, you can’t just use a longer SMA on the same timeframe … there are subtle but real differences in the locations of the averages due to more data being used to calculate the longer SMA from the lower timeframe chart, and I’ve found that the true higher timeframe averages are more reliable as support and resistance, since they are what longer-term traders on those higher timeframes are actually looking at and basing their trades on. You will be surprised at how often a 20 period simple moving average from, say, a 15′ chart, acts as support on a 5′ or 2′ chart. This will tell me how extended price is on multiple timeframes, or how deep a pullback is and thus how attractive a given setup looks across multiple charts, all without leaving the chart I’m currently working from. Over time, one way I’ve found to do this is by calculating a higher timeframe simple moving average and displaying it on a lower timeframe. After all, the same data is all there, it’s just presented differently. Soon I began to realize that it would help me simplify things and conserve screen space if I could analyze the higher timeframe charts while only using the lower timeframe chart. And depending on the time of day, I might have a 1 or 2′ chart, a 5′ chart, a 15′ or 60′ chart, and the daily or weekly chart open. To accomplish this, I use multiple timeframe analysis of a single stock, keeping multiple charts of the stock open at one time. Basically to trade in harmony with the larger forces that are at play. But no matter what chart my focus is on, the goal is to always try to trade in the direction of the higher timeframe trends. I was taught by my mentors to trade on a lower timeframe such as the 2-minute chart (early in the morning) or the 5-minute or 15-minute chart (later in the day). So why should you consider using multiple timeframe moving averages? In the type of trading I do, I rely heavily on the 20-period SMA as a reference point for intraday trend identification. Why Use Multiple Timeframe Moving Averages?
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