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"