Sunday, 31 August 2014

BECOMING A BETTER TRADER


BECOMING A BETTER TRADER





                      Becoming a better trader means being able to look at the market from many view points. Focusing on one time frame will narrow your view and opinion of the market. Therefore, it is important to get a bigger picture of the market. A successful trader is one who knows what the market is doing not just at the current moment but in all its time frames. This gives him a better picture of what the major trend is and where there is possible support and resistance and a place to put stops. When you get signals in multiple time frames, using the higher ones to get the green light to take a trade and the smaller ones to time a trade, you will increase your chances of success.
        A short-term trader shouldn't make all his decisions by using 1- and 5-minute charts, and a position trader needs to look at more than just daily charts. Whether a day trader or position trader, one should always be looking at many different time frames to time, plot, and monitor trades. After a trade is put on, look at the higher time level to monitor it for support and resistance levels and to see where to place stops. Look for reversals or moves too far from the trend line and/or moving average. Use the higher level to help hold winning trades longer and cut down on over trading. Find it best to use at least four time frames for day trading: the daily or weekly to get an overall picture of the trend, the 60-minute to keep track of the market, and then the 1- and 5-minute for entry and exit timing. No matter what technical indicators or systems one uses, trades should look compelling in every time frame. If you have a trade that is working on a small time frame and you get a signal on a longer time frame as well, this is a good place to add the trade. Overall, the more of the market you can see, the better you will be at trading it, as you will get a clearer picture.

High Probability Trading with Multiple Time Frames

1. Gain a better perspective on where the current market is.

2. Get more in tune with the market.

3. Get the overall picture of the market.

4. See the trend more clearly.

5. Time your trades more effectively.

6. Monitor trades with a higher time frame.

7. Look to see if the market is overextended.

8. Find better support and resistance levels.

9. Avoid overbought and oversold areas.

10. See profit levels more easily.

11. Cut back on trading by using higher time frames.

12. Hold on to winners longer.

13. Add to good trades at each time frame.

14. Trade only when all time frames are in sync.

15. Use the same system in different time frames to confirm trades.

Helpful Questions to Ask Yourself

  • Do I have a clear picture of the market in all its time frames?
  • Am I trading in the direction of the major trend?
  • Is the monitoring time frame overextended, overbought, or oversold?
  • How much room does it have to go?
  • Am I timing my entries?
                                                                                                                                   (  Marcel Link )

About

Parag Patil is a technical analyst and trading system designer with stock excel programmer. I hope the articles and live chart of nse future and mcx on this Website will be as helpful and profitable to you . I try to update and post new articles tips everyday. My motto is to encourage the traders, so that they should able to understand the technique views behind the moment of stocks. I have deeply analyzed with many technical indicator with parameter and added to my amibroker afl. And even taken backtest report which is never being implemented. Any of the analyst expect me. Seeing all this you may understand that my views is more technical than commercial. If you are profited by my views I fill happy.

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