Timeframes and top-down analysis

What it is

The same market looks different on each timeframe. A higher timeframe (daily, 4-hour) shows the main trend and the big levels; a lower timeframe (15-minute, 5-minute) shows the detail you time an entry with.

Top-down analysis means starting high and working down: decide the direction and the key zone on the higher timeframe, then wait for the lower timeframe to confirm inside that zone.

How to spot it

• A common pairing is daily or 4-hour for bias, 1-hour for structure and zones, and 5- or 15-minute for entries.
• The higher timeframe wins when the two disagree.

How to use it

• Mark higher-timeframe levels first, then only take lower-timeframe setups that line up with them.
• Keep the gap between timeframes sensible, roughly a factor of four to six.

Common mistakes

• Flicking between timeframes until one agrees with the trade you want.
• Trading lower-timeframe signals straight into a higher-timeframe level.

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