The vast majority of forex traders have heard of multiple time frame analysis in their foreign exchange  educations. That being said, this popular method of analysing charts and developing a strategy is often the first aspect of a traders analysis to be forgotten in the pursuit an edge over this market.

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In specialising as a day trader, momentum trader, breakout trader or long term trader most forex market participants forget about the larger overall trend, lose sight of clear levels of support and resistance and miss out on high probability trades. In this lesson, we will describe what multiple time-frame analysis is with examples and how to choose your timeframe.

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Multiple time-frame analysis is the act analysing the same currency pair on different frequencies (or time-frames). While there is no limit as to how many time-frames can be analysed or which ones to choose, there are general rules that most traders will follow.

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The most common approach is using three periods to give a broad reading of the market, while using less than three a significant loss of information, and using more will result in confusion and redundant analysis. When choosing the three time-frames, a basic strategy can be to follow a "rule of four." First, a medium-term period should determined, this time-frame should be as long as your average trade. Then, a shorter period should be chosen and it should be approximately one-fourth the medium-term period (for example, 15-min chart for the shorter time frame and 60-min chart for the intermediate time frame). Using this same method, the long-term time-frame will be chosen that is four times larger than the medium one (for example,60min for the medium time-frame and the 240-minute or four-hour chart would round out the three time frequencies).