Still watching 5-minute K-line charts to make trades? Then I have to tell you, this might be the main reason why you keep losing money.

Many new traders like to focus on short-term charts, fantasizing about quick profits every day, but they overlook a fundamental concept—multi-timeframe analysis. That’s also why some people lose money after a year of trading, while others can maintain consistent profits.

I’ve been using a trading method for over ten years, which is actually based on a simple three-layer logic:

**First Layer: Use the 4-hour chart to determine the overall trend**

The signs of an uptrend are clear—higher highs and higher lows. During this time, pullbacks are opportunities to go long. Conversely, if highs and lows are moving down, that indicates a downtrend, and consider shorting on rebounds. If there’s no clear direction in highs and lows, the market is sideways, and the smartest move is to stay out until a trend emerges.

Following the trend is the foundation of profitability; trading against it is like giving away money. This principle seems simple, but how many people can truly stick to it?

**Second Layer: Use the 1-hour chart to find specific entry points**

Once the trend is confirmed, the next step is to precisely locate your entry. Support zones are usually near trendlines, moving averages, or previous lows—these areas often show clear buy signals. Conversely, resistance zones are near previous highs or areas with heavy trading volume, which are good for reducing positions or taking profits. This layer determines your trading accuracy.

**Third Layer: Use the 15-minute chart for final entry confirmation**

When the price reaches the desired level, don’t rush to enter. Wait for reversal patterns—engulfing candles, divergences, golden crosses, etc. Especially, breakouts should be accompanied by volume; volumeless breakouts are often traps for false moves. The small timeframe is used for final confirmation, not for setting the trend direction.

**How to combine these three layers?**

The process is straightforward: 4-hour chart for the big trend → 1-hour chart for specific entry points → 15-minute chart for signals.

A key detail: if there’s a conflict between different timeframes—for example, the 4-hour chart shows an uptrend but the 1-hour chart shows a downtrend—the safest approach is to stay in cash and wait. Don’t force trades. Also, always set stop-losses on small timeframe trades to prevent being repeatedly stopped out.

This method sounds simple, but few people can stick to it consistently. Trading isn’t about guessing whether prices will go up or down; it’s about waiting for the market to present opportunities to you. Some people can’t wait, and sometimes, the best move is to stay out of the market.