The “Ins and Outs” of Multi-Timeframe Analysis for Beginner Traders

In order to make money in the crypto market, traders must learn how to identify market movements and underlying trends, and trade around those accordingly. As traders, whether a professional or a novice, we’re all looking for ways to increase the probability of profitable trades and to minimize risks.

One of the more commonly used techniques is multi-timeframe analysis. In this piece, we’ll share more about this technique — how to access different multi-time frame views on Bybit and explore some of the advantages and disadvantages of each view. So without further ado, let’s look at how we can help you improve your trading strategy by looking at things from a new viewing perspective. 

What is a multi-time frame?

Put simply, multi-timeframe analysis is the process of viewing the movements of an asset at different times. Just like in forex or equity markets, cryptocurrency movements can be analyzed across multiple timeframes, which can be set to as brief as one minute or as long as one month. 

Technical traders, whether operating in traditional finance or in the world of crypto, would often analyze prices over various time periods to try and get a big picture view. Through this they hope to identify key market trends, in order to find a suitable entry or exit price. This is because what may initially look like an upward trend, over a small time frame, can actually be downward over a longer period. 

Usually a longer time frame is used to establish a longer-term trend, while a shorter time frame is used to spot ideal entries into the market.

How to use Bybit’s multi-time frame view?

Once you’ve logged onto the Bybit platform, simply click “Trade”, then select your preferred contract, and you’ll have the option to adjust your view based on specific time-frames. Whichever you select, whether it’s a minute-by-minute breakdown or a daily breakdown, your trading view will be altered. It’ll either be “zoomed in” if you look at a shorter time frame, or you’ll get more of a “wide-angle view” if you’ve selected a longer timeframe. Whichever time frame you select, you’ll be able to see information based on the open and close price within that time period. 

In addition, you’ll also be able to select from a drop-down list of multiple key indicators that can be applied to your timeframe view. Applying these indicators will provide you with relevant inputs and signals that will help you make a trade. The shorter the time frame selected, the more trading signals you’ll probably spot. 

Let’s take a look at three different time frames, long-term, short-term and intraday, and some of the pros and cons associated with each. 

Long-term traders

Long-term traders tend to prefer daily, weekly and even monthly charts. They do this to try and establish a long term trading perspective, in order to determine the best entry and exit points over a shorter time frame. 

Short-term traders

Short-term traders have a preference for the hourly timeframe, or even selecting a four to six hour timeframe to analyze, though some scan for up to a week. 

Intraday traders

Intraday traders prefer to view minute-by-minute charts. For example, they’d usually select one minute chart view or a 15-minute chart view to get a quick snapshot as they aim to enter and exit the market the same day. 

For those who are still relatively new to trading, it may be good to experiment with different timeframes. Scan across multiple timeframes and simulate trading to see if there’s one that you prefer or are more comfortable with.