Ideal timeframes and chart interval range between 1 hour , 1 day to 1 week.
Larger time frames, tend to provide more reliable price signals. This means that a trend formation on weekly
or daily chart has more weight than that of a 1 hour or 4 hour. A trading pattern on an hourly chart will have
more reliability than a 5 minute chart etc etc.
Trading from a 1 hour chart is more reliable than a 30 minute chart , and a Daily chart is more reliable than a
4 hour chart in terms of perceiving a trend bias as well as identifying repeatable trading patterns. Again, the
higher the time frame, typically the more weight each signal or pattern has.
Market direction is called a trend or market bias.
A 100 period moving average on a daily chart has more bearing on the trend then that of a 21 period moving
averaged on a daily chart.
The most obvious trend is seen on a daily chart, if its heading in one direction, from left to right, either up or
down, it’s a trend. Trends may be small or large in size, its depends on your time horizon and time frame.
Short term counter trend pressure (movements against the broader trend) tend to be aborted and result in
subsequent failures. Over 70% of counter trend movements fail, so it’s important we try to stick with the
broader trend where possible.
Dominant market trends are like comparing a cruise liner to a runabout speed boat, dominant trends are
slow, cumbersome and take a long time to gain momentum. They are the most important influence on price
behavior on all time frames being traded.
Short term trends that are in line with the long term trends tend to result in continuation and increase
profit potential as well as increase risk reward scenarios.