Chart Battle: Which Time Frame For Gains?

If stock charts were still all on paper, the past few weeks could be visualized with a trader throwing a stack of charts into the air in a bout of frustration.

Which chart to follow? Why? And why the constant switching between different time frames?

Thus, the never-ending chart battle.

In the scope of day-to-day trading, what works when trying to decipher these chart signals and contain frustration?

Simpler’s traders continually sift through all the variables and focus on time frames and patterns that have proven insightful in the past. The essentials — squeeze, reversion to the mean, support, resistance — create a foundation to review across all time frames.

Recent weeks of solid momentum revealed an extended market on daily charts. This signaled a possible pull back (like sessions Monday and Tuesday). At the same time the weekly charts continue to point toward a continuation of market strength (like the rally today), possibly for months ahead.

Recent sessions have presented opportunities for traders — with the necessary tools and skills — to approach this market more aggressively. The rally last week that gave way to the pullback early this week that has now turned to the upside again all revealed entries and exits for profit potential.

Traders pursuing more aggressive trades with this much market action must be prepared to wait out any sudden, unseen variables — such as a bad earnings report or emotion-fueled news. This level of risk vs. reward requires confidence in the trade, proper position sizing, patience, and some extra intestinal fortitude to allow these setups to work.

On the flip side, traders must be disciplined to know if the trades aren’t working and exit accordingly.

The market has revealed a phase where traders can buckle down to pursue opportunities whether following hourly, daily, weekly, or monthly charts. Each time frame requires adjustment to strategy and proper execution based on market movement.

During this phase of the market it is important to stay focused and prepared to take advantage of what the market offers.

We Saw: Market bouncing back from recent losses — 

• Tech rising while NFLX loses ground
• Rally in transports with space to roam
• SPAC money run gets SEC smacking

We’re Watching: Squeezes that look to rock and roll —

• Dumping market “favs” that underperform
• Whether mean is set and another rally revs up
• Sorting through chart battle for profit potential