In trading and quantitative analysis it is always nice to know what others see on their charts. Tradesignal offers an easy way to display multiple timeframe indicators, giving you the confidence that you will not miss key information that other traders see. This article will show you how it is done.
Multiple Timeframe Indicators
There are technical indicators nearly every trader uses. An example might be RSI or Bollinger Bands. Usually these indicators are used with the same setting, regardless of timeframe. A 20 bar Bollinger Band with 2 standard deviations can be found on hourly, daily and weekly charts. A 14 bar RSI is also used by many traders on minute to weekly charts.
So it might be a good idea to display these different timeframes on one chart, so you never miss what other traders see.
Multiple Timeframe chart analysis
The chart above shows you an example for a multiple timeframe indicator setup. It shows a daily chart with daily and weekly Bollinger Band and RSI. Note how Boeing behaved at the beginning of the year.
The daily RSI started to signal an overbought scenario. But the weekly RSI stayed in a neutral area. This would have led to the conclusion, that there is still some space to the upside, and even with the daily RSI in overbought area and the market touching the daily upper Bollinger Band there was no indication for a market reversal.
Things surely changed when Boeing started to trade outside the weekly Bollinger Band at the end of February. Also the weekly RSI went over the overbought area. This in combination with the very wide weekly Bollinger Band left no technical long term trades on the playing field. A sure set up to close the position or apply a very tight stop loss. As the chart reversed, your stop would have been triggered, before Boeing gaped down due to the grounding of their fleet.
Another example for the benefits of multiple timeframe indicators is Intel. In march 2019 one can see basically the same setup as described for Boeing above. As it is always easy to see patterns in the past, I will do a market call for the current environment. As I am writing this article on November 18th, Intel has got an interesting multiple timeframe setup. RSI is overbought on the daily and weekly timeframe, and Also the daily and weekly Bollinger Bands are quite wide. So best not to set up a big bet on Intel’s future performance right now. If the daily and weekly analysts both see an overbought scenario, who would be left to buy?
Programming of multiple timeframe indicators
The programming of multiple timeframe indicators in Tradesignal is quite straight forward. Due to the ability of the software to load upper timeframe data in the background (see inline data in help) you can use the standard functions and just load the higher timeframe data to calculate the needed indicator.
The code shown above can be used on daily or intraday charts. Protection id given by restricting the execution using the timebase function. Everything else is just based on copy&paste of the original functions and loading the needed data.
If one places these indicators on an intraday chart, you will see the intraday + daily + weekly indicators. If you place them on a daily chart like on the examples above, you will see the daily + weekly indicators.
Stay creative and convert your own favourite indicators to a multiple timeframe version.
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