New here, and relatively new to trading, but i know the basics . I'm confused about what time frames i should be looking at. Reading Brian Shannons book, he says look at 50 day for long term trend, 5 day to go a little deeper and intra day to pick entry point. But i'm pretty sure he is talking about day trading. I'm more interested in swing trading, holding a stock for anywhere from a couple days to weeks, or even a couple months. Any guidance appreciated.
Two or three time-frames would be standard. The main time-frame is the one in which you identify chart set-ups and patterns, and across which you plan your entry and holding time. It is definitely wise to use a longer time-frame to confirm that your projected trade is not going to seriously oppose an established consistent long-term trend. You could optionally use a shorter time-frame to refine your entry price levels.
The concept of trend-setup-entry is a good one. But specific measures will vary with the instrument and the market you want to trade. You won't get those from a book.
I look at 3 charts for swing trading. A 3 month daily to see what's happening recently; a one year daily and a 5yr weekly to give me a longer term view.
%% Good; 50+ 200day moving average for fine tune, finer tune. 5 year/ 10 years data helps also. Wisdom is profitable to direct
Kullamagie is one of the best swing traders around and I believe he uses the 10,20,50 and 100 day MAs.
As a swing trader, I look for setups/opportunities primarily on the daily charts. I can usually see the trend on the daily as well, though zooming out to a weekly chart is also good for checking trend and getting a larger perspective. I'll also check shorter timeframes occasionally (typically 195 min) for setups and frequently use shorter timeframes to find more accurate timing for entries (78 min and 15 min). Even shorter can be helpful when looking for an exit, especially for options trades.
As a swing trade you will look to hold for weeks to a couple month, looking at monthly chat will give you an idea of the trend. Narrowing it down to lower time frames ( i.e: weekly, daily, 4h ) you can look for what phase the market is in and also enter on a lower time frame from precise entry and smaller stop loss. however, you can still enter on the higher time frame if it meets your entry criteria.