If you are a position trader, long-term position trader, you usually hold your trades from six months to one year onwards. Daily chart is actually enough based on that trading horizon. And when I say, what’s six months to one year? I mean, usually if you have a profitable trade, how long do you hold a profitable trade?
Because if you have a nonprofitable trade and you have a stop loss, it could happen, as within a few days you could stockout already. So, I’m more concerned about for your profitable trades, usually how long do you hold it? Six months to a year, then generally a daily chart would be good enough for you. If you are longer term swing trading that, which means that your position usually hold from three months to six months of that nature, then I would say that daily is also good enough. You might not even need to go below a daily chart for a longer term swing trading.
All right? But if you start to going to shorter term swing trading, which means that you could be holding a trade for a few days to a few weeks, that kind of thing, then it might make a bit more sense for you to go down to a four hour chart or maybe even an hour chart. The difference is that if you go from daily down to a four hour chart, you just see more of the details. So, because your trading horizon becomes shorter, you need to see more details within a shorter trading horizon. And that’s the reason why, in that case, you might need to go down to four hour to one hour chart.
And obviously, if you are intraday trader, then you wouldn’t have to probably look at things like a five minute chart or maybe, let’s say, a one minute chart from there. So, that is general guideline. I hope that will be helpful for you.
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