High Probability Trading Strategies

CHAPTER 2

Multiple Time Frame Momentum Strategy

An Objective Filter to Identify High Probability Trade Setups

The Multiple Time Frame (MTF) Momentum Strategy is the most powerful approach I've discovered in over 20 years to filter any market and any time frame for trade direction and execution. The MTF Momentum Strategy is a key factor to the trade plan that identifies high probability trade setups with minimal capital exposure.

Just about every trading book or course will emphasize that you always want to “trade with the trend.” It's great advice. If you are always trading with the trend, you should mount up some very impressive gains.

Two big questions are usually not clearly answered: “How do you objectively identify trend direction?” and “Is the trend in the early or late stages?”

In almost every trading book and course I've seen over the past 20 or more years, the trading educators show many after-the-fact examples of how their trend indicator identified the trend direction long after the trend was established. It is easy to show a trend on any chart long after the trend is established. But how do we identify trend direction in the early stages? How do we identify when an established trend is in the later stages and in a position to make a trend reversal? Without some approach to help identify where within the trend the market likely is, typical trend analysis will usually be too early or too late to be useful over time.

It is easy to fill a book with after-the-fact examples ...