Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

Trading with Different Time Frames

There are count-less different technical indicators used by traders in an attempt to predict future price movements, and since every person has a different trading style the same indicator can be used in different ways or different time frames, depending on their particular view of the futures market. For example, a long-term trend trader may prefer a weekly chart while the swing trader may feel more comfortable with a daily chart. Both traders may use the same technical indicator, but in different time frames. The patterns and confirming signals may be the same, but the results can differ depending on the time frame from which you view the chart.

Traders may benefit from widening their point-of-view by using more than one time frame. Each time frame can offer a different perspective and reveal a pattern or signal not seen on the other time frame.

I am sure you have all see a movie or read a story about someone finding a treasure map or a mysterious code that reveals very little at first glance, but once the different levels are peeled away and examined closer, more clues begin to appear. Price charts can work in the same way. For example, as a swing trader you may not see a buy/sell pattern on a daily chart, but once you drop down to a 60-minute or 30-minute chart, a pattern may appear that was hidden in the longer-term view. Had you stuck to only one time frame, you would have missed the pattern entirely.

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**THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER-COMPENSATED FOR THE IMPACT IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES.