Tackle Today: Charting with multiple time frame analysis
June 9, 2020
Last update: August 2021
≈ Seeing the market from many vantage points ≈
Markets are down this morning for the first day in a few weeks. When the S&P 500 broke out of resistance and the 200-day simple moving average, the bulls ran with price action. Now we are seeing a red candle, at least in the first hour of trading, at least on the daily candlestick charts. Some of this is being attributed to the market hesitating in front of the FOMC meeting tomorrow. Others are just calling it a day of profit-taking.
Neither of those reasons matter, frankly, as the key thing to do as a short-term trader is focus on price action and build plans for entry, management, and exiting your trades. The best way to do this is to have a good view of all the chart levels that matter the most by using multiple time frame analysis.
When you are reading charts, the most common time frame to look at is the daily candlestick chart. But that is not enough to evaluate the true conditions of technical analysis. Multiple time frame analysis is a key skill to develop. Every trader should have the ability to go down into shorter time frames like the 5 min, 15 min, and hourly charts. Every trader should also back out their time frame to analyze weekly candles and monthly candles to get a view of the big picture.
Which time frames you use, and how many, is a matter of personal preference. Some of the coaches at Tackle Trading will look at many different time frames, while others might stick to 3 or 4.
During any given trade, it’s important to know what’s happening on the Intraday, Daily, and Weekly charts. This will give you greater confidence, and more information to make decisions with when you’re executing your trades.
Chart of the Day: $SPY Multiple Time Frame: 5 min, 1 Hr, Daily, Weekly candlesticks.
In the chart above, you see the ETF SPY with a 5 minute, 1 hour, Daily and Weekly candle chart setup.
Video of the Day: How to perform multiple time frame analysis on a swing trade
In this video, Coach Noah shows you exactly how to do a multiple time frame analysis on a swing trading. A look at how to determine the MMM or the expected move for a stock on earnings.
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