Pathshala: Time frames

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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnXsyLDf-aJJfXSf7EB1KwqUz8Ph0Z-60qKwvHwCjLuiwUIcONCGP09peB0-KL68zX1czWth1SbvdaxpW83JJlLEpEizLsVc6BI5Qz2CrmQ2XeP3V03uZOeqTeEKPKkTeEI2RdGfojz8w/s1600/TF.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="198" data-original-width="210" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnXsyLDf-aJJfXSf7EB1KwqUz8Ph0Z-60qKwvHwCjLuiwUIcONCGP09peB0-KL68zX1czWth1SbvdaxpW83JJlLEpEizLsVc6BI5Qz2CrmQ2XeP3V03uZOeqTeEKPKkTeEI2RdGfojz8w/s1600/TF.png" /></a><span style="font-family: "arial" , "helvetica" , sans-serif;">In order to consistently make money in the markets, traders need to learn how to identify an underlying trend
 and trade around it accordingly. Common seance include: "trade with 
the trend", "don't fight the tape" and "the trend is your friend". </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Trends can be classified as primary, intermediate and short term.
 However, markets exist in several time frames simultaneously. As such, 
there can be conflicting trends within a particular stock depending on 
the time frame being considered. It is not out of the ordinary for a 
stock to be in a primary uptrend while being mired in intermediate and short-term downtrends.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Typically, beginning or novice traders lock in on a specific time 
frame, ignoring the more powerful primary trend. Alternately, traders 
may be trading the primary trend but underestimating the importance of 
refining their entries in an ideal short-term time frame. </span></div>
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<i><span style="font-family: "arial" , "helvetica" , sans-serif;">Let's start with lowest time frame charts. </span></i></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>1. Intraday Chart </b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">This chart is used to plot price movements <i>during a trading session</i>. It would consist of all the data points between a market opening and closing. 
<br /><br />Intraday charts give you a detailed picture for the day's 
movement. These charts can be used to view a single day's movement from 
session opening to closing or many days intraday movement from opening 
to closing. 
<br /><br />For example, I may want to see the price movement on the index for an important day like the RBI Policy or may want to see the last fortnight's intraday charts leading up to the event. 
The most commonly used time frame on an intraday chart is 1 hour, also known as an hourly chart. 
<br /><br />Depending on your trading style and preference you can have 
charts as low as tick charts which is a chart that plots price every 
second.

<br /><br /> (Later in this letter I will share my secret and logic of choosing the perfect time frame for trading...)

<br /><br />For the time being just have a look at the chart below. It's a 
60 min chart of Nifty since 17th October 2014. The data between the 
dotted vertical lines represents one day's trading activity. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"> <table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSkK8_piQjKfsYy4TDPFK5wlOSWsOmY6bpY9lKmwUu6eS4jX3vautn6t6CCtngcYMoxjlzNgH2A3jlpdGk4-e4yszbjv5RB4wrtL_Z9T4TT6FeU7mVI5YG81mS11Q3U-lK-SYs4FWKiHg/s1600/Tf+1a.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="362" data-original-width="500" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSkK8_piQjKfsYy4TDPFK5wlOSWsOmY6bpY9lKmwUu6eS4jX3vautn6t6CCtngcYMoxjlzNgH2A3jlpdGk4-e4yszbjv5RB4wrtL_Z9T4TT6FeU7mVI5YG81mS11Q3U-lK-SYs4FWKiHg/s1600/Tf+1a.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Nifty Intrad<span style="font-family: "arial" , "helvetica" , sans-serif;">ay Chart</span></b></span></td></tr>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>2. </b></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Daily Chart</b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="font-family: "arial" , "helvetica" , sans-serif;">A day represents a complete cycle of events in our lives 
right from sunrise to sunset. We wake up every morning, perform our 
duties during the day and retire from all the chores in the night and 
the cycle moves on. We live our lives in parts and a day is the best 
representation of such parts.

<br /><br />An advantage of looking at daily charts is that it makes your 
trading less emotional as it adds only one new piece of information 
every day. So you can sit back and take a prudent decision without 
worrying for tracking price change every minute. I have personally 
observed and learned that focusing on daily charts helps you avoid two 
biggest mistakes a common trader does i.e. overtrading and overanalyzing.

<br /><br />Most market observers including fundamental analysts, financial 
media etc. gauge prices on a day-to-day basis. Even the NAV of a mutual 
fund is calculated on a day-to-day basis. Psychologically, daily price movements is what affects the most to anyone in the financial markets.

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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEha-_M0ORDdeZYDWJDz7_OAzq6XoGc0p6D3GMT8BPXn6PUl1H7eCo6C_qBUL2jT5tRtt9UbpnDWISLgUgP3v6mc2oAAKX_85SqyrTcQm_ZgQ6S2SkFvVgQxsugGXH5dKSl5sUnyrGoNj90/s1600/TF+1b.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="362" data-original-width="500" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEha-_M0ORDdeZYDWJDz7_OAzq6XoGc0p6D3GMT8BPXn6PUl1H7eCo6C_qBUL2jT5tRtt9UbpnDWISLgUgP3v6mc2oAAKX_85SqyrTcQm_ZgQ6S2SkFvVgQxsugGXH5dKSl5sUnyrGoNj90/s1600/TF+1b.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><b>Nifty Daily Chart</b></td></tr>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>3. Weekly Chart</b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b> </b>
<br />Weekly charts plot a whole week's price data. So a weekly candle 
opening price would be Monday's open, and close would be Friday's 
closing level. The highest and lowest that the stock or index may have 
travelled during the whole week will become the high and low for the 
weekly candle. 
<br /><br />The chart that I have attached below is a weekly chart and it 
shows data for the same period that the daily chart posted above shows. 
 You must have noticed that the number of candles have reduced in the 
weekly chart and it is also <b>less sensitive</b> to price movements 
compared to the daily chart. That's because it combines 5 days data 
points into 1 week. This helps focus more on the trend rather than its 
sensitivity.</span></div>
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNlZanfZ2APW2NudygeuMmS0U-mRHHQpG5PXLbd5VZxgpXI5sIkPPluJsjTZUKSx7ZYikFuaAZ0wLNO85hKYVxQfmMJK56C0wP4GhDPChgnEWrlA4FdUYonIgoFq2MnjFOcWChirl-yqE/s1600/TF+1c.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="362" data-original-width="500" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNlZanfZ2APW2NudygeuMmS0U-mRHHQpG5PXLbd5VZxgpXI5sIkPPluJsjTZUKSx7ZYikFuaAZ0wLNO85hKYVxQfmMJK56C0wP4GhDPChgnEWrlA4FdUYonIgoFq2MnjFOcWChirl-yqE/s1600/TF+1c.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><b>Nifty Weekly Chart</b></td></tr>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /><b>4. Monthly Chart</b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b> </b>
<br />Monthly charts are prepared using the same principles that are used 
for preparation of weekly charts. The opening price of the first trading
 day of a month's open is considered as the opening level for month. 
<br /><br />And the last trading day's close is considered as closing level 
for the month. These charts are mostly used by investors with a longer 
horizon. There are charts even higher than monthly time frame ones like 
quarterly, half-yearly and yearly but unless your investment horizon 
matches Warren Buffett's you don't need to look at these. </span></div>
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2RttRuNGZ3wQS_pRwU156OuqkQ29SWUgcQlHQC7EHTXeUzJT25_Wi4VA9wBkrYpQoH-i5vRZArFwT6xHIkvKfjuAhLC7LpegTufiftL-Atp_YN3tvdGhdQUbXmhWMlH3XGduEt30q1rI/s1600/TF+1d.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="362" data-original-width="500" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2RttRuNGZ3wQS_pRwU156OuqkQ29SWUgcQlHQC7EHTXeUzJT25_Wi4VA9wBkrYpQoH-i5vRZArFwT6xHIkvKfjuAhLC7LpegTufiftL-Atp_YN3tvdGhdQUbXmhWMlH3XGduEt30q1rI/s1600/TF+1d.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Nifty Monthly Chart</b></span></td></tr>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Ideal Chart Time frames based on market participation</b></span></div>
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<td align="left" rowspan="2" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #cc0000;"><b>Market Participant</b></span></span></td>
<td align="left" rowspan="2" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #cc0000;"><b>Time in Position</b></span></span></td>
<td align="left" rowspan="2" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #cc0000;"><b>Expected Returns in % per trade</b></span></span></td>
<td align="center" colspan="2" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #cc0000;"><b>Chart used for</b></span></span></td>
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<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #cc0000;"><b>Trend  Determination</b></span></span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #cc0000;"><b>Entry & Exit Points</b></span></span></td>
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<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Long  term investor</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Months to years</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">30% and higher</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Monthly</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Weekly</span></td>
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<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Intermediate  term trader</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Weeks to months</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">12%-30%</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Weekly</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Daily</span></td>
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<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Swing  trader</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">3-20 days</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">6% - 20%</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Daily</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Hourly</span></td>
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<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Day  trader</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Hours</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">0.5% - 2%</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Hourly</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">10 minute</span></td>
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<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Micro  trader</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Seconds to minutes</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">A few pips</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">5 minute</span></td>
<td align="left" style="border-bottom: 1px solid #b3b3b3; border-right: 1px solid #b3b3b3; padding-left: 5px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">1 minute</span></td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">As promised, let me tell you how I go about choosing a timeframe for
 my analysis. The table above will help you determine an ideal time 
frame to choose for your analysis depending on the category of 
participant you fall into. 
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">I am sure several of you will fall in the category of either a 
swing trader or intermediate trader. I have spent most of my career in 
recommending ideas to these two group of market participants, and if you
 are into this kind of trading, then this is the perfect platform for 
you!
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Okay, so let's assume you are a swing trader interested in 
trading ideas that generate returns of anywhere between 6-20% in a 
period of 3-20 days. 
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">The chart that you should pick up for your analysis or trend 
determination is a daily chart. All your trading decisions should be 
based on this chart alone. The chart you pick up for trend determination
 will become your <i><b>'Chart of Choice' (CoC).</b></i>  Now once you are convinced that the stock you have chosen is worth your hard-earned money...
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"> <i>'STOP' </i>
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><i>Don't be in a hurry to place an order with your broker. Just 
hold on to your excitement and put your phone back where you picked it 
up from.</i>
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Now once you are settled just jot down your points/arguments for entering the stock.
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Once you are done with it, just check one degree higher time 
frame chart above your 'CoC' to CONFIRM whether this chart also 
reinforces the same view you had about the stock when you analyzed it on
 your 'CoC'.
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">In this case we will check the weekly chart of the stock and confirm our views on a higher time frame.
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">If it doesn't confirm, then it's not the best of things to go ahead with this stock.
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">On the other hand, If you are convinced that the stock is worth 
your money, just hold on to your breath and check a lower degree time 
frame chart for best entry opportunity.
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">A lower degree chart in this case would be an intraday chart. 
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><i>My favorite timeframe on an intraday chart is 75 minutes. </i>
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">The 75 minute timeframe chart divides our market hours which start from 9.15 am to 3.30 pm (375 minutes) into <b>exactly 5 equal-sized candles.</b> This helps me get a better picture for the day and score over the hourly candles, which breaks unequally at the end. 
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">In case I want to move further down on the timeframe, I choose a
 25 min candle which divides 75 min into 3 equal parts or a 15 min 
candle which divides 75 min into 5 equal parts. 
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Check for a best entry opportunity on intraday charts and then 
finally place an order with your broker, who will be eager to buy at the
 market rate but you would stay firm with your price levels and not get 
influenced with his sweet talk.
</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;">Now I am sure you must be thinking that what do I look for on a 
weekly, daily or intraday chart and how do I decide whether to buy or 
sell a stock. Don't worry! As we move ahead in this journey I will show 
you techniques that help you figure out exactly how you are to decide 
that. But until then I have given you a process to follow while doing 
your analysis. 
</span></div>
<h3 style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Summary:</span></h3>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">" <b>A trend on a longer time frame has had more time to develop, 
which means that it will take a bigger market move for the security to 
change course</b>." </span></div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">
</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>What time frames should you be tracking?</b></span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b> </b><br />A 
general rule is that the longer the time frame, the more reliable the 
signals being given. As you drill down in time frames, the charts become
 more polluted with false moves and noise.
 Ideally, traders should use a longer time frame to define the primary 
trend of whatever they are trading. (For more on this see, <i>Short-, Intermediate- and Long-Term Trends</i>.)</span></div>
<div style="text-align: justify;">
<br /></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">
</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Once the underlying trend is defined, traders can use their preferred
 time frame to define the intermediate trend and a faster time frame to 
define the short-term trend. Some examples of putting multiple time 
frames into use would be:</span></div>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">
</span></div>
<ul style="text-align: justify;">
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A swing trader,
 who focuses on daily charts for his or her decisions, could use weekly 
charts to define the primary trend and 60-minute charts to define the 
short-term trend.</span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A day trader
 could trade off of 15-minute charts, use 60-minute charts to define the
 primary trend and a five-minute chart (or even a tick chart) to define 
the short-term trend.</span></li>
<li><span style="font-family: "arial" , "helvetica" , sans-serif;">A long-term position trader
 could focus on weekly charts while using monthly charts to define the 
primary trend and daily charts to refine entries and exits.</span></li>
</ul>
<div style="text-align: justify;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">The selection of what group of time frames to use is unique to each individual trader. Ideally, traders will choose the main time frame they are interested in, and then choose a time frame above and below it to complement
 the main time frame. As such, they would be using the long-term chart 
to define the trend, the intermediate-term chart to provide the trading 
signal and the short-term chart to refine the entry and exit. One note 
of warning, however, is to not get caught up in the noise of a 
short-term chart and over analyze a trade. Short-term charts are 
typically used to confirm or dispel a hypothesis from the primary chart.</span></div>
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Time frames Time Frame - Chart Analysis

In order to consistently make money in the markets, traders need to learn how to identify an underlying trend and trade around it accord...