Here’s An Example Of Three-Dimensional Trading
A lot of traders use the
5-minute chart in conjunction with the daily chart for position triggers.
For instance, a trade might trigger as an
intraday pattern on the 5-minute chart develops off a key daily level, or better
yet, from a technical zone which is defined by more than one level of support.
Personally, I like to take a ‘3-D’ approach to looking for potential triggers
whenever possible. For me, the 5-minute and daily are my bread and butter,
but I’ll often use the 30- and 60-minute charts in conjunction with these other
two time frames in attempting to key off a stronger potential entry. Sometimes
it might cost you a few extra pennies as you wait for the ‘middle’ time frame to
signal the green light, but quite often it’s worth the wait.
12:54:41
Intraday Update Alert
The S&P500 ETF (SPY)
has tested triple pivot lows and the 50-Day EMA on the daily chart–down .87 at
113.95. Reversal longs might be considered on a move above the 5-minute
pivot highs and the 8-period ema, at 114.01, as this also defines a 30-minute
extended chart double bottom pivot trigger.
On the 5-minute time frame, after an initial test of the daily zone, the SPY
did trigger above three levels of resistance–by .01. But, on the 30-minute
chart, we see that a possible doji low is taking shape, with triggers above the
figure, or 114. In this case, I’d rather wait the extra couple pennies and pay
for admission into the ‘3-D Show’, should it come into town in today’s trade.