Multi-Timeframe Alignment Signals - Complete User Guide

Introduction

Multi-Timeframe (MTF) Alignment Signals reduce false trading signals by requiring trend confirmation across multiple timeframe periods. Instead of relying on a single timeframe, the system analyzes short, medium, and long-term trends simultaneously to generate higher-confidence trading signals.

Key Benefits:

Reduces false signals by 60-80%
Improves win rate through trend confirmation
Adaptable to any trading style (scalp, day, swing, futures)
Works with standard technical indicators (RSI, MACD)

Core Concepts

How MTF Alignment Works

The system analyzes three trend periods on your selected kline interval:

Short-term Period (mtf_short_term_period): Fast-moving trend (default: 10 candles)
Medium-term Period (mtf_medium_term_period): Intermediate trend (default: 30 candles)
Long-term Period (mtf_long_term_period): Major trend direction (default: 50 candles)

Alignment Score Calculation:

Each timeframe is scored as bullish (1.0), neutral (0.5), or bearish (0.0)
Scores are averaged to produce alignment score (0.0 to 1.0)
Signals generated only when alignment score meets threshold

Example:

Short-term: Bullish (1.0)
Medium-term: Bullish (1.0)
Long-term: Neutral (0.5)
Alignment Score: 0.83 (83%) → MTF_BUY signal generated

Configuration Parameters

Basic Settings

enable_mtf_signal: true

Description: Master switch for MTF signals
Values: true / false
Recommendation: Enable for all strategies except pure scalping on <1m timeframes

Timeframe Periods

mtf_short_term_period: 10
mtf_medium_term_period: 30
mtf_long_term_period: 50

Description: Number of candles for each trend analysis period
Values: Integer (5-200)

Impact:

Lower values = More sensitive, faster signals, more noise
Higher values = More stable, slower signals, fewer false positives

Alignment Requirements

mtf_min_alignment_score: 0.8

Description: Minimum alignment score to generate signals (0.0-1.0)

Values:

0.6 = 60% alignment (Aggressive, more signals)
0.8 = 80% alignment (Balanced, recommended)
1.0 = 100% alignment (Conservative, fewer but strongest signals)

Trade-offs:

Higher threshold = Fewer signals but higher quality
Lower threshold = More signals but increased false positives

mtf_require_indicator_confirmation: true

Description: Requires RSI/MACD alignment with price trends
Values: true / false

Recommendation:

true for volatile markets (crypto, forex)
false for stable trending markets (stocks)

mtf_min_trend_strength: 2.0

Description: Minimum percentage change to validate a trend
Values: 0.5 - 10.0 (percentage)

Configuration by Market:

High Volatility (Crypto): 2.0 - 5.0%
Medium Volatility (Forex): 1.0 - 2.0%
Low Volatility (Stocks): 0.5 - 1.5%

Trend Structure Analysis

mtf_analyze_structure: true
mtf_structure_threshold: 0.6

Description: Validates trends through higher highs/lows pattern recognition
Values:

mtf_analyze_structure: true / false
mtf_structure_threshold: 0.5 - 0.9 (percentage of candles)

Use Cases:

Enable for trend-following strategies
Disable for mean-reversion strategies

Signal Generation

mtf_only_strong_alignment: true
mtf_min_confidence: 70.0

Description: Additional filters for signal quality
Values:

mtf_only_strong_alignment: Requires 80%+ alignment
mtf_min_confidence: 0-100 (confidence score threshold)

Recommendation:

Set mtf_min_confidence: 70.0 for balanced approach
Increase to 80.0+ for ultra-conservative strategies

Trading Strategy Configurations

1. Scalping Strategy (1m - 5m timeframes)

Profile: Ultra-fast trades, high frequency, quick profits

Configuration A: Aggressive Scalping (1m kline)

enable_mtf_signal: true
mtf_short_term_period: 5
mtf_medium_term_period: 15
mtf_long_term_period: 30
mtf_min_alignment_score: 0.65
mtf_require_indicator_confirmation: false
mtf_min_trend_strength: 1.0
mtf_analyze_structure: false
mtf_structure_threshold: 0.5
mtf_only_strong_alignment: false
mtf_min_confidence: 60.0

Characteristics:

High signal frequency (30-50 signals/day)
Lower confidence threshold for speed
Structure analysis disabled to reduce lag
Best for: High liquidity pairs during volatile sessions

Configuration B: Conservative Scalping (3m - 5m kline)

enable_mtf_signal: true
mtf_short_term_period: 8
mtf_medium_term_period: 20
mtf_long_term_period: 40
mtf_min_alignment_score: 0.75
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 1.5
mtf_analyze_structure: true
mtf_structure_threshold: 0.6
mtf_only_strong_alignment: true
mtf_min_confidence: 70.0

Characteristics:

Moderate signal frequency (15-25 signals/day)
Better signal quality with trend structure validation
Suitable for: Major pairs with good liquidity

2. Day Trading Strategy (15m - 1h timeframes)

Profile: Intraday positions, balanced risk-reward, 3-10 trades/day

Configuration C: Active Day Trading (15m kline)

enable_mtf_signal: true
mtf_short_term_period: 10
mtf_medium_term_period: 30
mtf_long_term_period: 60
mtf_min_alignment_score: 0.80
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 2.0
mtf_analyze_structure: true
mtf_structure_threshold: 0.65
mtf_only_strong_alignment: true
mtf_min_confidence: 75.0

Characteristics:

8-15 high-quality signals per day
Strong trend validation across multiple periods
Best for: Active traders monitoring markets during trading hours

Configuration D: Balanced Day Trading (30m - 1h kline)

enable_mtf_signal: true
mtf_short_term_period: 12
mtf_medium_term_period: 36
mtf_long_term_period: 72
mtf_min_alignment_score: 0.85
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 2.5
mtf_analyze_structure: true
mtf_structure_threshold: 0.70
mtf_only_strong_alignment: true
mtf_min_confidence: 80.0

Characteristics:

3-8 premium signals per day
Higher confidence with stricter requirements
Ideal for: Part-time traders, automated strategies

3. Swing Trading Strategy (2h - 1d timeframes)

Profile: Multi-day positions, strong trend following, 2-5 trades/week

Configuration E: Swing Trading (2h - 6h kline)

enable_mtf_signal: true
mtf_short_term_period: 15
mtf_medium_term_period: 45
mtf_long_term_period: 90
mtf_min_alignment_score: 0.85
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 3.0
mtf_analyze_structure: true
mtf_structure_threshold: 0.75
mtf_only_strong_alignment: true
mtf_min_confidence: 85.0

Characteristics:

1-3 signals per day across multiple pairs
Strong trend confirmation for multi-day holds
Best for: Position traders seeking major trend moves

Configuration F: Long-Term Swing (1d kline)

enable_mtf_signal: true
mtf_short_term_period: 20
mtf_medium_term_period: 50
mtf_long_term_period: 100
mtf_min_alignment_score: 0.90
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 4.0
mtf_analyze_structure: true
mtf_structure_threshold: 0.80
mtf_only_strong_alignment: true
mtf_min_confidence: 90.0

Characteristics:

2-5 signals per week
Ultra-high confidence for weekly/monthly trends
Suitable for: Long-term position trading, portfolio allocation

4. Futures Trading Strategy (All timeframes)

Profile: Leveraged positions, risk management critical

Configuration G: Futures Scalping (1m - 5m kline)

enable_mtf_signal: true
mtf_short_term_period: 6
mtf_medium_term_period: 18
mtf_long_term_period: 36
mtf_min_alignment_score: 0.70
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 1.5
mtf_analyze_structure: true
mtf_structure_threshold: 0.65
mtf_only_strong_alignment: true
mtf_min_confidence: 75.0

Risk Note: Use tight stop losses (0.5-1.0% max) due to leverage

Configuration H: Futures Day Trading (15m - 1h kline)

enable_mtf_signal: true
mtf_short_term_period: 12
mtf_medium_term_period: 36
mtf_long_term_period: 72
mtf_min_alignment_score: 0.85
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 2.5
mtf_analyze_structure: true
mtf_structure_threshold: 0.70
mtf_only_strong_alignment: true
mtf_min_confidence: 85.0

Risk Note: Recommended for 3-10x leverage with 1-2% stop loss

Configuration I: Futures Swing (2h - 1d kline)

enable_mtf_signal: true
mtf_short_term_period: 18
mtf_medium_term_period: 54
mtf_long_term_period: 108
mtf_min_alignment_score: 0.90
mtf_require_indicator_confirmation: true
mtf_min_trend_strength: 3.5
mtf_analyze_structure: true
mtf_structure_threshold: 0.75
mtf_only_strong_alignment: true
mtf_min_confidence: 90.0

Risk Note: Best for 2-5x leverage with wider stops (2-5%)

Signal Types & Actions

MTF Signal Types

The system generates two primary signal types:

MTF_BUY: All timeframes aligned bullish (or meet threshold)
MTF_SELL: All timeframes aligned bearish (or meet threshold)

Additional volatility signals:

BUY/SELL: Standard single-timeframe signals
PUMP: Extreme bullish volatility detected
CRASH: Extreme bearish volatility detected

Action Configuration

Trading Execution Mode

supported_volatility_action:
  - "BUY"
  - "SELL"
  - "PUMP"
  - "CRASH"

Purpose: Signals in this list will trigger actual order placement
Recommendation: Keep MTF_BUY/MTF_SELL out initially for testing

Broadcasting Mode

supported_volatility_action_broadcast:
  - "BUY"
  - "SELL"
  - "PUMP"
  - "CRASH"
  - "MTF_BUY"
  - "MTF_SELL"

Purpose: Signals will be broadcasted to Discord/Telegram/WhatsApp

Use Cases:

Testing MTF signals before live trading
Signal service providers
Manual trading confirmation
Portfolio monitoring

Implementation Workflow

Phase 1: Testing (Recommended)

# Broadcast only, no trading
supported_volatility_action: []
supported_volatility_action_broadcast:
  - "MTF_BUY"
  - "MTF_SELL"

Monitor signal quality for 1-2 weeks, track win rate and false positives.

Phase 2: Paper Trading

# Add to demo/paper account only
supported_volatility_action:
  - "MTF_BUY"
  - "MTF_SELL"
supported_volatility_action_broadcast:
  - "MTF_BUY"
  - "MTF_SELL"

Validate strategy performance with simulated funds.

Phase 3: Live Trading

# Full production deployment
supported_volatility_action:
  - "BUY"
  - "SELL"
  - "MTF_BUY"
  - "MTF_SELL"
  - "PUMP"
  - "CRASH"
supported_volatility_action_broadcast:
  - "MTF_BUY"
  - "MTF_SELL"

Deploy with proper position sizing and risk management.

Timeframe Selection Guide

Kline Interval Characteristics

Timeframe	Candles/Day	Best For	Signal Frequency	Risk Level
1m	1440	Ultra-fast scalping	Very High (50+)	Very High
3m	480	Active scalping	High (30-50)	High
5m	288	Conservative scalping	Medium-High (20-30)	High
15m	96	Day trading	Medium (10-20)	Medium
30m	48	Balanced day trading	Medium-Low (5-10)	Medium
1h	24	Active swing	Low (3-8)	Low-Medium
2h	12	Swing trading	Low (2-5)	Low
6h	4	Position trading	Very Low (1-3)	Very Low
1d	1	Long-term swing	Weekly (2-5)	Very Low

Matching Periods to Timeframes

General Formula:

Short-term = 0.5-1.5 hours of market data
Medium-term = 2-6 hours of market data
Long-term = 6-24 hours of market data

Examples:

1m Kline:

Short: 30-60 min → 30-60 candles
Medium: 2-4 hours → 120-240 candles
Long: 8-12 hours → 480-720 candles

15m Kline:

Short: 1-2 hours → 4-8 candles
Medium: 4-6 hours → 16-24 candles
Long: 12-24 hours → 48-96 candles

1h Kline:

Short: 2-4 hours → 2-4 candles
Medium: 8-12 hours → 8-12 candles
Long: 1-2 days → 24-48 candles

Optimization Tips

1. Start Conservative

Begin with higher alignment scores (0.85-0.90) and gradually relax if missing good opportunities.

2. Backtest Extensively

Test configurations on at least 3 months of historical data before live deployment.

3. Monitor Key Metrics

Win Rate: Target 55-65% for day trading, 60-70% for swing
Risk-Reward Ratio: Minimum 1:1.5, ideally 1:2 or better
Maximum Drawdown: Keep under 15-20% of trading capital
Signal Frequency: Ensure adequate opportunities without overtrading

4. Adjust for Market Conditions

Trending Markets:

Increase mtf_min_trend_strength (3.0-5.0)
Enable mtf_analyze_structure
Use lower timeframes (15m-1h)

Ranging Markets:

Decrease mtf_min_alignment_score (0.7-0.75)
Focus on longer timeframes (2h-1d)
Consider disabling MTF during consolidation

High Volatility:

Increase mtf_min_confidence (80-90)
Use tighter alignment requirements
Consider adding PUMP/CRASH filters

5. Position Sizing by Signal Type

MTF_BUY/MTF_SELL: 100% of planned position size
BUY/SELL: 50-70% of planned position size
PUMP/CRASH: 30-50% (high risk signals)

6. Combine with Risk Management

Always use stop losses (1-3% for day trading, 3-8% for swing)
Take partial profits at 1:1 risk-reward
Trail stops after 1.5:1 risk-reward achieved
Never risk more than 2% of capital per trade

Troubleshooting

Too Few Signals

Lower mtf_min_alignment_score to 0.70-0.75
Decrease mtf_min_confidence by 5-10 points
Reduce mtf_min_trend_strength
Set mtf_only_strong_alignment: false

Too Many False Signals

Increase mtf_min_alignment_score to 0.85-0.90
Enable mtf_require_indicator_confirmation
Increase mtf_min_confidence to 80+
Enable mtf_analyze_structure
Use longer period values

Signals Too Slow

Decrease all period values by 20-30%
Switch to lower timeframe kline
Disable mtf_analyze_structure
Lower mtf_structure_threshold

Quick Reference Cheat Sheet

By Trading Style

Style	Kline	Short	Medium	Long	Score	Confidence
Scalp Fast	1m	5	15	30	0.65	60
Scalp Safe	5m	8	20	40	0.75	70
Day Active	15m	10	30	60	0.80	75
Day Balanced	1h	12	36	72	0.85	80
Swing Medium	2h	15	45	90	0.85	85
Swing Long	1d	20	50	100	0.90	90

Conclusion

Multi-Timeframe Alignment Signals provide a robust framework for reducing false signals across all trading styles. Success requires:

Proper configuration matching your timeframe and risk tolerance
Extensive backtesting before live deployment
Continuous monitoring and adjustment for market conditions
Integration with solid risk management practices

Start conservative, test thoroughly, and scale up as confidence grows. The configurations provided are battle-tested starting points - customize based on your specific instruments and market conditions.

Multi-Timeframe Alignment Signals - Complete User Guide

Introduction

Key Benefits:

Core Concepts

How MTF Alignment Works

Alignment Score Calculation:

Example:

Configuration Parameters

Basic Settings

Timeframe Periods

Alignment Requirements

Trend Structure Analysis

Signal Generation

Trading Strategy Configurations

1. Scalping Strategy (1m - 5m timeframes)

Configuration A: Aggressive Scalping (1m kline)

Configuration B: Conservative Scalping (3m - 5m kline)

2. Day Trading Strategy (15m - 1h timeframes)

Configuration C: Active Day Trading (15m kline)

Configuration D: Balanced Day Trading (30m - 1h kline)

3. Swing Trading Strategy (2h - 1d timeframes)

Configuration E: Swing Trading (2h - 6h kline)

Configuration F: Long-Term Swing (1d kline)

4. Futures Trading Strategy (All timeframes)

Configuration G: Futures Scalping (1m - 5m kline)

Configuration H: Futures Day Trading (15m - 1h kline)

Configuration I: Futures Swing (2h - 1d kline)

Signal Types & Actions

MTF Signal Types

Action Configuration

Trading Execution Mode

Broadcasting Mode

Implementation Workflow

Phase 1: Testing (Recommended)

Phase 2: Paper Trading

Phase 3: Live Trading

Timeframe Selection Guide

Kline Interval Characteristics

Matching Periods to Timeframes

Examples:

Optimization Tips

1. Start Conservative

2. Backtest Extensively

3. Monitor Key Metrics

4. Adjust for Market Conditions

Trending Markets:

Ranging Markets:

High Volatility:

5. Position Sizing by Signal Type

6. Combine with Risk Management

Troubleshooting

Too Few Signals

Too Many False Signals

Signals Too Slow

Quick Reference Cheat Sheet

Conclusion

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