Viewing Charts On Multiple Time Frames:
Okay, I’m going to talk a little bit about viewing charts on different time frames. So you might ask, why you might want to do that?
Basically you might want to get an idea of what’s really happening both on the bigger picture and on the smaller, more zeroed-in picture. For instance, the first thing you might want to do is look at the daily chart and get an idea of what the general daily, big term trend on the stock is. And then once you get an idea of that you might want to look at a 15 minute chart and then a 5 minute chart and then a 3 minute chart and then a 1 minute chart.
Each chart is going to tell you something different and give you a different look. It also depends partially upon what time frame you’re trading in. So, if you’re going to be doing quick scalping you’re going to be on maybe as small as a 5 second chart or a 15 second chart or a 1 minute chart. If you’re doing swing-trading you might be on a daily chart or you might be on a 15 minute chart or an hourly chart. Also, once you get in to a trade, or you’re thinking of getting into a trade, if you look into all of the time frames you get a different idea of what’s really going on.
So, let’s say that you’re thinking of getting into a trade that you might be into for a few hours. In that case you might want to look at the daily chart and just get an idea of what the stock has been doing over the last couple of months, and then you might look at, say…a 15 minute chart to get a better idea of the longer time frame and then you might start to look at a 2 minute chart, or a 3 minute chart or a 5 minute chart to think about where you might want to enter. And then when you’re actually thinking about entering you might want to go down to a 1 minute chart to actually pick your entry, to try and get the best entry possible.
Another thing about multiple time frames is that any reasonable trading software or charting package will allow you to set your software so that you can easily switch between different time frames. So, depending on the software that you have it will either be readily available to you or you may have to create some buttons, or some hot keys that will allow you to switch between the different time frames and that’s one of the first things you should set up with a new charting package or any charting software that you are going to be using for any length of time.