Putting The Trade In Its Proper Perspective
I always look for multiple
time frame confirmation when thinking about long and short trade opportunities.
I approach each and every trade with the
idea that at least two time frames have to make sense–one being the daily, and
the other one being an intraday perspective. Typically, I use the 5-minute
chart, and either the 15, 30, or 60 minute extended view as my third ‘look’ into
the stock’s technical picture.
Once some kind of confirmation on the daily is
acknowledged, then it becomes a matter of which time frame to focus the actual
entry, as well as risk versus reward on, in order to capture the best odds of
participating in a move should the analysis actually work out–and through the
intraday ‘slips and giggles.’
In today’s trade, Netease
(
NTES |
Quote |
Chart |
News |
PowerRating)
triggered a potential gap fill reversal long on the daily chart, but the daily
bar of the prior session happens to be a wide range hammer bar. For me, a stop
loss below the hammer lows is too much risk acceptance–but on the other hand,
the 5-minute chart has to deal with too much micro-analysis and the usual ‘slips
and wiggles’ to really appreciate a potential trade. In this situation, I like
the 15-minute view best, as an appropriate blend of micro and macro.
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After triggering NTES decided to break back into
the range. Oh well, such is the game of trading. Maybe this won’t be my best
call, but until 32.75 is broken, the view is still intact, and the plan still in
effect in this guy’s humble opinion.
Chris Tyler