How To Improve Day Trading Entries (Timeframe Alignment)

so recently I had a great discussion about how I use multiple time frame analysis in my trading and I thought I'd share some of it here too because this concept is what took my trading to that next level and it immediately helped increase the probability of my trades following through it almost feels like I have the power to bet on the winning team in like a fourth quarter of a basketball game because I'm just getting much more momentum on my side to where price is heading now that doesn't necessarily mean it's a guaranteed win because we all saw Tracy McGrady hit 13 points in the last 33 seconds to win the game so anything can happen especially with trading but increasing the probability is what I'm looking for so what is multiple time frame analysis it is looking at and analyzing charts on more than one time frame so let's say I come across a stock I'm looking to trade and it has a pretty buy set of pattern off of whatever time frame I'm looking at but before I do anything else I ask myself what is the lower and higher time frames also doing because even though it's a buy setup and looking higher on this time frame it may also be setting up a cell setup and looking lower on another time frame so there may be some conflict there that may cause my trade to struggle if I were to get into it now there's many aspects to analyzing multiple time frames like finding support and resistance trade management determining your targets but what I want to focus on in this video is looking for time frame alignment meaning if I want to play something long I want not just one chart but multiple charts to all look higher I want to see them all aligned with the direction I want to play because when I get multiple time frame alignment there's much more momentum in that direction there's more confirmation there's a common saying it's easier to swim with the current than against it which means it's easier to trade with the trend than against it so when I have not just one but multiple currents all pushing into One Direction it just makes it that much stronger when you think about it it seems like such a simple and effective concept but it's something that is often overlooked so then the next question is what time frames do I look at if you watched any of my live training videos you know I use the one two five fifteen minute and the hourly for my intraday time frames but I also have the daily weekly monthly for my larger time frames so anytime I pull up a stock those are the only eight time frames I'm looking at and analyzing before I take any trades now I'm not looking for alignment on all eight of them but for my day trades I like to see the one two five fifteen minute aligned and for my swing trades the hourly daily weekly and monthly aligned so let's get into some real examples so first notice on my charts that the only indicators I use is the moving averages the blue line is the 20 period moving average and the orange line is the 200 I'll definitely make an in-depth video on how I use them but one of the ways I use the 20ma is to quickly identify the trend if the blue line is moving upwards with candles trading above it it's in an uptrend which is when I focus on buying opportunities and if the blue line is moving downwards with candles trading under it it's on a downtrend where I focus on shorting opportunities it helps to know what setups I look for which I'll link on the screen right now if you want to check it out so here I have a buy setup of the 15 minute I see a nice pop from this morning with a clean pullback into the rising 20ma which I also use to time my entries but before I jump into this trade I want to check on my other time frames to make sure that they're aligned with the direction I want to play which in this case is for the price to move higher again I use the one two five fifteen minute for my intraday also have the hourly on there but let's focus on these for now and have a look so usually I just need to look at the one time frame lower because if that is aligned it will mean even the smaller time frames under that should be aligned as well or if it's not then there's no trade for me anyway yet at least so for that reason and also to make it easier to follow along let's focus on the time frame I'm trading and the one time frame underneath that in this case we can see that the one time frame lower the five minute is actually in a downtrend right the 20ma pointing down with candles trading under it so we do not have time frame alignment and no matter how clean this 15 minute buy setup is there's going to be a bit of a fight coming from the five minute downtrend and that's a problem for me because if I get triggered in on this buy setup and the five minute downtrend decides to follow through and continue then I'm going to take a loss now that doesn't mean I should completely pass on this trade it just means it's not ready yet so what I like to wait for is to see if that five minute downtrend fails so I let that first meta buy setup go and now I see that the five minute is ending the downtrend and transitioning into an uptrend the 20ma is starting to curl up with the candles trading and holding above it and I can see that the momentum is Shifting to the upside so by just waiting for that secondary entry tree waiting for my time frames to get aligned gives me an entry with better momentum in the direction I'm trading and off it goes here's another 15 minute buy setup but before I do anything let's take a look at the one time frame blower on the five minute and it looks like we have the same situation here I see that we have a declining 20 with candles trading under it so again I'm gonna pass on this initial buy setup because if it triggers I don't want to sit through this tug of war that's going to happen between these two time frames and make me sweat through this trade before it decides which direction it wants to go I'd rather just wait for more confirmation skip through this chop and see if that five minute downtrend can fix itself first and get in on this secondary entry when I have time frame alignment on my side and look at the move it makes once we have time frame alignment now sometimes they don't give a secondary entry and just work right away and go without me which I'm okay with because a lot of times they don't work either so if we look here on this 15 minute cell setup that's triggering while the five minute is on an uptrend this time the five minute is the dominant one and continues to move higher which would have stopped me out so this keeps me out of trouble and avoids unnecessary chop pests it also helps with my management if I decide to do this 15 minute buy setup while the 5 minute is in Conflict I can't do anything but leave my stop at the pivot and hope that the five minute fails the downtrend whereas if I wait for another entry where my time frame is aligned I have a better idea if the trade doesn't look good anymore I can get early signals of the trade failing and can raise my stop and cut my losses by noticing if the other time frames start to go on the downtrend again keep in mind just because we have time frame alignment doesn't guarantee it'll work right let's look at one more here's a 15 minute cell setup with the 5 minute being a bit too strong and turning into an uptrend so I'm going to wait and let it go and now I see a buy setup has formed and triggered on the smaller time frame so actually now I don't even really need to wait for this to turn into a downtrend I can actually put my order in under this tail because if it triggers it means that the five minute buy setup failed and will turn into a downtrend giving me the time frame alignment in this case it took a bit of time before triggering also given a one two three but look at how trades tend to flow in its direction a lot better when I have time frame alignment so hope this is making sense it's such a simple and Powerful tool to have in my trading it's engraved in me now to always check multiple time frames if I see conflict I let Mommy and Daddy fight it out until they are in agreement in harmony with the direction I want to trade and go from there alright if you found this to be helpful all I ask is that you take a second of your time to like the video leave a comment feel free to ask questions subscribe if you want more content like this one as always I appreciate you for being here and I hope to see you on the next one [Music] [Applause]

Channel: James Rich Young

Views: 31,829

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Id: 4ji0BUSQwXI

Length: 8min 23sec (503 seconds)

Published: Tue Aug 23 2022