8 Minute Read

Tales of a Technician: Mind your Time Frame

March 23, 2021

By | No Comments

Do you want to increase the emotional tug of your swing trades? Zoom into a one minute chart and watch the noise. Every little uptick will generate pleasure, and every red bar will deliver pain.

We engaged in just such an exercise during Monday’s Trader’s Lounge while discussing Comcast (CMCSA).

The communications space has been red-hot. Take a look at DISCA, FOXA, NWSA, or VIAC. They’re all on rocket ship rides to the moon. Comcast has joined them and even offered a nice bull retracement pattern entering this week. Naturally, we included it in our Scouting Report.

The Setup

$CMCSA chart

CMCSA ended Friday with a doji candle signaling a potential reversal was in the offing.

If we advance the chart to today, you’ll notice Comcast triggered on Monday and is continuing higher Tuesday morning.

$CMCSA chart

Distraction

Here’s where Monday morning’s lounge comes into play. Though the daily candle looks as if CMCSA charged higher all day long, it actually was a little messy in the morning. Here’s the 5-minute chart.

$CMCSA chart

While we were discussing the trade, CMCSA fell below the 50-period moving average on the 5-minute time frame. One trader understandably asked if we should be concerned. Might this breakdown morph into a bigger reversal that stopped us out?

Maybe. Anything is possible.

But worrying about it isn’t productive. We placed our stop under the pivot low for a reason. And that reason was because it would take a breach of that support zone to invalidate the bull retracement pattern. No amount of intraday shenanigans is worth abandoning the plan.

Notice how the price quickly reverted higher and went on to more profits for the trade.

Here are the key lessons from this episode.

First: If your original stop loss placement was sound, then don’t second-guess it.

Second: Let the trade play out. Don’t obsess over the intraday chart when you’re managing positions off the daily time frame.

Third: if you really want to strip the emotions from the equation, then automate everything.


Read more Tales of a Technician [FREE Content]


Tackle Trading: Financial Freedom is a Journey. Sign up now for a 15-day free trial.

Financial freedom is a journey

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.


Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.

Chart Modal

Tackle Trading

Book a FREE Consultation

Sign up for a free consultation to build your Educational Plan.