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TradeStation Trading

Updated on September 10, 2014

Best TradeStation Trading Approach

Tired of the dismal profits you're making in your trading?

Maybe some of the tools you are using are giving you lagging information. You can make the correct decision based on your indicator, but if the indicator is lagging, often the result is a losing trade. This article covers the 5 most vital trading facts necessary for profitable trading using multiple time frame price action.

TradeStation Trading Using Multiple Time Frame Price Action

Reveals 5 Critical Keys Vital To Profitable Trading

Most traders would concede that the number one fact of trading is price action. Price action is always right, therefore if you trade against price action for any reason you will lose money. Don't get trapped like so many traders into relying on moving averages, ADX, or a whole list of other indicators that introduce significant amounts of lag into your analysis. When traders rely on these lagging indicators and ignore the fundamentals of trading based on price action, profits are greatly reduced. Remember, price action is the single most important trading fact. Read on to discover the 5 critical keys available if you use multiple time frame (MTF) price action in your trading.

# 1 - Interplay of Price Action of 8 different times frames at once.

Try the old methodology of flipping through 8 different time charts and you will quickly see that approach isn't very practical. Imagine the quantum leap in your trading advantage when you can visually see the price action interplay of 8 different time frames all in one graph. This is the only viable approach for using MTF analysis.

# 2 - Market Modes.

The interplay of these 8 price action lines show the current market mode:

  • MTF trend mode will be displayed when the 8 price lines start fanning out much like a moving average ribbon indicator fans out. During the trend mode you only want to enter trades in the same direction as the trend.
  • MTF consolidation mode will be displayed when at least 6 or 7 price lines are very close to each other. During a MTF consolidation you will want to set up both a long and short breakout type trade entry.
  • MTF counter trend mode will be displayed when 5, 6, or 7 price lines are an extreme distance away from the daily price line. When this occurs you have a MTF counter trend trade setup.

Knowing which market mode you're trading is critical to identifying the proper trading setup for making profitable trades.

# 3 - Support and Resistance.

A potential trading range is signaled when the 5 minute price line pulls back inside the other 7 price lines. The support and resistance zones for this trading range will be at the 60, 120, 240, and/or daily price lines. Since real-time support and resistance occurs where the higher time price lines are, you will know in advance where real-time support and resistance zones will be. This is powerful trading since knowing where support and resistance zones are is critical to knowing how to properly manage your trade entries and exits.

# 4 - High Probability Trading with Low Stop Loss Risk Trading Set-ups.

It is a fact that the higher the time frame chart you trade on, the higher the required stop-loss amount you will risk per trade. This is why so many authors teach a MTF approach where you determine the trend direction from the daily charts, get the trade entry signal from the 1 hourly chart, and then use the 5 minute chart to make your trade entry. Why mess with three different charts when you can do it all on a single 5 minute chart? Just use the 5 minute chart to make your entry and use the multiple time frame price action indicator to see the higher time frame price action with the added bonus of knowing the market mode and where support & resistance zones are located. Trading the 5 minute chart will reduce your trade risk to one tenth the risk amount vs. trading on a daily chart.

# 5 - Multiple Time Frame Reversal Trade Set-ups.

You've probably heard that you can't pick market tops and bottoms. This is true when you're using a single time frame approach, yet when using multiple time frames it is very doable and leads to very powerful reversal trade setups. These MTF reversal trade setups are when 6 or 7 price lines are an extreme distance away from the daily price line and then the 5 minute price line pulls back into the support and resistance zones. These support and resistance zones are at the 60, 120, and 240 minute price lines. The trade entry trigger is when the 5 minute price line breaks through these key support and resistance zones, heading toward the daily price line. These MTF reversal trade setups are powerful trading opportunities.

The above 5 critical keys reveal why the MTF Price Action Indicator is the single best TradeStation indicator you can use on your trading charts.

Trade In the same Direction as the Stock Market is Moving - Advanced Directional Stock Market Indicator

What are you thoughts or experience about using Multiple Time Frames in your trading?

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      barrycrow60 6 years ago

      This site shown me the different techniques in spotting market trends, hot markets and best stocks. Thanks for the effort guys!

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      johnnyhide 6 years ago

      There are lots of tools and guides but this one gets me one step closer in my dreams.

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      dickfeind 6 years ago

      I am starting a business and all the facts i needed i find it here. Thank you all!

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      kate00moss 6 years ago

      As a starter in this business the site will guide me, thanks for this!

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      tiffanydiamonde 6 years ago

      Excellent TradeStation Resource Books are well illustrated, thanks !

    • profile image

      jcarmen33 6 years ago

      Good articles for trading are here, hoping i could used this. thanks!

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      texasprojectw 6 years ago

      Best TradeStation Trading Approaches are explained well good job guys.

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      crystalshane777 6 years ago

      Guys good site i could use this in my business.