Behind the Scenes Intraday POTash Trades in 3 TimeFrames
Just about every good trader I know analyzes and trades using more than 1 time frame. (our theEquilibrium just did a great analysis of Apple on 3 Time Frames). Whether they're daytraders or swing traders, using multiple time frames means focusing on the price action you're waiting to attack but also being aware of the big picture. There are multiple cross currents in each time frame, a seemingly safe trade in one time frame could be a suicide trade in another time frame with someone waiting to ambush you. Emphasizing multiple times is the reason we created the show "Multiplicity" here on FINZ.tv.
For me, trading is most like driving. When you're driving in one lane, you're focused on the car in front of you, just as if you're trading on the 15-minute time frame you're focused on that chart. However, when you're driving you can't just stare at the license plate in front of you. You have to scan the lanes beside you, check your mirrors, and scan the big picture with the road, street lights, pedestrians, etc. So for example, traders using the 15-min time frame would check a higher time frame (30-min or 1-hr) for road conditions while honing in on the 5-minute time frame for precise entries. (There are 3 5-min bars in a 15-min bar, so one could "anticipate" the pattern on the 15-min bar by watching a group of 3 5-min bars)
(my trading screen of POT in 3 time frames [left to right]: 5-min [trade execution frame], 15 min [main time frame], daily)
Maybe it was because I had a few days off, but Wednesday (6.10.09) was a fun and successful trading day for me. I had mentioned on twitter Tuesday night that agriculture stocks like Potash (POT) and Mosaic (MOS) had nice bounces off of the 20 day moving avg on the daily charts on Monday, which made me want to get long. However, Tuesday's rally in POT already took it close to prior resistance at $120 such that risk/reward wasn't tempting. [...]
- Multiplicity EP.4: Alamo drills down into the multiple time frames of UNG
- Chart Attack Ep. 2: Long Father's Day, WFC, RIG, AA, VNO, & Tony Soprano
- Multiplicity Ep.1: Whiffing Potash (POT) fertilizer for 10-mins, 30-mins, a whole day?
- 12/14/09 S&P Emini & Futures Recommendations
- 12/07/09 S&P Emini & Futures Recommendations
