Part II. Buy or Sell? Commander in Pips: So, we’ve just studied why we even need multiple time frame analysis at all. Still before passing right to the application of it, I just want to show you why you really need it by some examples. Pipruit: Oh, this should be interesting. Commander in Pips: I hope so. Although to analyze just a single chart is not simple work at all, we will try to go a bit further. Tell me, what you see on followed chart: Chart #1 | EUR/USD 60-min and 7X5 DMA Let’s suppose that you’re hourly chart trader. Here is what you see as on chart #1. What kind of trade do you prefer in such environment? Pipruit: Well, I see an excellent thrust down, 7X5 holds trend very well. Now the market touches MA again, so, it’s time to sell, I suppose. Commander in Pips: It’s difficult to make some other conclusion just looking at this picture. Now let’s see what has happened after… Chart #2 | EUR/USD 60-min and 7X5 DMA Pipruit: Hm. Curious. Looks like I’ve entered right at the moment of trend shifting. Well, this could happen sometimes. And what is that yellow zone that you’ve marked on the chart? Commander in Pips: Well, yes, this could happen. But if you apply multiple time frames, you never enter short here. Here is why: Chart #3 | EUR/USD Weekly Market has reached Weekly Agreement support at weekly oversold – to enter short right here was suicide. After the has touched this level it has jumped up for about 400+ pips, because this was not just a deal of the daily chart but mostly weekly.