Stock TA (Technical Analysis) can be improved with Multi-Time Frame Analysis
Multi-Time Frame Analysis is the analysis of a market over several time lines. For example, hourly, daily, weekly, monthly, etc. time lines. The more timelines that are in agreement, the sounder the investing strategy and the safer the play. In essence, the idea is to determine the trend over multiple timelines. For example, in the daily timeline, we will look at a minimum of one year’s worth of data and each bar will represent one day’s worth of data. On a weekly chart, we will examine at least 5 years worth of data and each bar will represent a week’s worth of data. On a monthly chart, we will examine 10 years worth of data and each bar represents a month’s worth of data. The idea is to get as many timelines to agree as possible.
Stock TA for Short to intermediate term traders
The focus here can be on the hourly and daily charts. The goal would, therefore, be to wait till the technical indicators on both the hourly and daily charts are trading in the same ranges. If you are looking to go long, then wait till both are trading in the oversold ranges and vice versa
Stock TA for traders with longer trading horizons
The focus should be on the weekly and monthly charts. When the picture (technical indicators) on both are trading in sync, this is the best time to open long or short positions.
Chart sources for Stock TA
In our opinion Trading view offers one of the best charting services on the internet for those looking for a paid subscription. While Stockcharts is great, their prices are significantly higher and than those of trading view with more or less the same functionality.
Futures traders can go to the following sites
Final thoughts on Stock TA via Multi-time frame analysis
The Trend is determined by employing trend line analysis. Do not confuse this with what our trend indicator does. The Trend indicator does not work by drawing trend lines; it re-calculates the trend and informs you when to go long and or short in advance of the development. In other words, you open long and or short positions before the masses even catch a whiff that something might be amiss.
Multi-time frame Analysis can be turbocharged if you understand that the main driving force behind the markets is emotions. Most players don’t base their investment decisions on logic; they based them on emotion. Emotions are what drives the markets. Thus if you understand what emotion is gripping the markets you can come out ahead of the crowd.
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