Hello I am experimenting with weekly charts, on the NASDAQ index, to assist in determining trend direction and Long/Short bias. Is anyone else using weekly charts and any tips or advice ? I formerly was almost a 100% William O'Neil methods (CANSLIM) guy, but his system has generated many false alarms over the years, which I wish to avoid. Thanks for any info you guys can provide
It depends on what you are looking for. Some classical chart patterns do not work on higher time frames, like the weekly, monthly or yearly charts and will simply generate tons and tons of false signals. Generally speaking, all the so-called consolidation patterns, like the flags and pennants (or even the triangle formations to some extent) are simply not suited for the weekly and higher time frames. On the other hand, reversal patterns like Head and Shoulders or Double tops/bottoms do respond well on the weekly or monthly charts, as the accumulation/distribution process usually takes time to unfold. Personally I would stick with the daily charts, they are reliable enough for long-term trading purposes, as far as technical analysis is concerned.
Make sure you use a multi-timeframe approach with any instrument you might trade otherwise you just using a periscope view.
Experience shows otherwise, the more time frames you use the more confused you get! Traders should not believe all the crap they read on trading books, like the top-down approach by Elder and the like. In fact, brokers want us to be really really confused so they can profit from our emotional trading. Stick with one time frame, believe me it's plenty enough.
Well, can you show us any proof or evidence that shows that trading with multiple time frames will give the trader some kind of extra statistical edge, if any?
My opinion is that daily charts are effective for "break out" type trades or "new all time high" trades of individual stocks, but more and more I am of the opinion that to determine overall market trend and Bull or Bear condition, weekly charts are much better than daily.
Monthly weekly daily 4H 1H open simultaneously column view 4H & 1H used only for trend re-entries or TP Standard day in & day out only chart viewed full-screen is the DAILY
Again it all depends on your holding period. Because let's face it, the weekly and monthly charts are totally useless if the trader is scalping, day-trading or even swing trading the market (and holding the position for only a couple of days). I mean come on, if I see a buying opportunity on the 15min charts, I am certainly not going to look at the weekly or monthly charts just to make sure they are also in an uptrend mood, that's total stupidity.