multi-timeframe-analysis

Multi-Timeframe Analysis

Higher timeframes set the direction. Lower timeframes refine the entry. Never trade against the higher timeframe trend unless you have very strong reasons.

The 3-Screen Method

| Screen | Timeframe | Purpose | What to Look For | |--------|-----------|---------|-----------------| | Screen 1 | Weekly | Trend bias | Primary trend, major S/R, 200-week MA | | Screen 2 | Daily | Setup | Pattern formation, indicator signals, entry zone | | Screen 3 | 4H / 1H | Entry timing | Precise entry price, tight stop placement |

How to use it:

1. Weekly decides direction — only take trades in the weekly trend's direction
2. Daily identifies the setup — pullback to support in uptrend, rally to resistance in downtrend
3. Hourly/4H times the entry — wait for the lower TF to confirm reversal in your direction

Prerequisites

No dependencies required. Framework applies to any timeframe data. Enhanced with Groww MCP (multi-interval candles) or yfinance (pip install yfinance) for weekly/monthly history.

Fetching Multi-TF Data

When data tools are available:

Weekly:  fetch_historical_candle_data with interval=1w
Daily:   fetch_historical_candle_data with interval=1d
Hourly:  fetch_historical_candle_data with interval=1h (limited to ~30 days)

For weekly indicators via yfinance: yf.download("SYMBOL.NS", period="2y", interval="1wk")

Screen 1: Weekly Analysis

Check these on the weekly chart:

• Trend: Series of higher highs/lows (up) or lower highs/lows (down)?
• Position vs MAs: Price relative to 20W and 50W SMA
• RSI(14) weekly: Above 50 = bullish bias, below 50 = bearish bias
• Major S/R: Horizontal levels with multiple weekly touches
• Volume trend: Rising into the trend direction = healthy

Weekly verdict: Bullish / Bearish / Neutral — this sets your trading bias.

Screen 2: Daily Analysis

With the weekly bias established:

• Look for setups that align: Pullbacks to buy in uptrend, rallies to sell in downtrend
• Pattern identification: Flags, wedges, double bottoms/tops, breakouts
• Indicator signals: RSI, MACD, Bollinger on daily
• Volume: Confirmation of the setup (declining volume on pullback = healthy)

Daily verdict: Setup present / No setup / Counter-trend setup (risky)

Screen 3: Entry Timeframe (4H / 1H)

Once weekly bias + daily setup align:

• Wait for lower TF confirmation: A candlestick reversal pattern, RSI bounce, or MACD cross
• Place entry: At the confirmation signal
• Set stop: Based on lower TF structure (tighter = better R:R)
• Target: From daily/weekly levels

Confluence Scoring

Award 1 point for each alignment. This keeps you honest about setup quality.

| Factor | Point | |--------|-------| | Weekly trend agrees with trade direction | +1 | | Daily shows valid setup pattern | +1 | | RSI supports on daily timeframe | +1 | | MACD supports on daily timeframe | +1 | | Key S/R level provides clear stop or target | +1 | | Volume confirms the move | +1 |

| Score | Action | |-------|--------| | 5-6 | Strong setup — full position size | | 4 | Good setup — full position size | | 3 | Marginal — half position size | | 2 | Weak — skip or paper trade only | | 0-1 | No setup — do not trade |

Common Mistakes

• Trading against the weekly trend hoping for a reversal — the weekly trend wins most of the time
• Using only one timeframe — you miss context and enter with poor timing
• Forcing alignment — if timeframes disagree, the answer is "no trade" not "trade anyway"