If I look at the daily chart, should I also look at the weekly chart? Should I also look at a four-hourly chart? That means, the lower timeframe and a higher timeframe. Personally, I think that is a personal choice. Obviously, it depends on your trading horizontal as well. Let’s say, for example, if I am a position trader. My trades I typically hold for one year or maybe even more than one year, for example.
You might think that if that’s the case Philip,we should be looking at weekly charts, right? However, I will say that I will continue to look at daily charts even if I am a long-term position trader. Because, straight away, the daily chart allows me as a long-term position trader to be able to see all the fine-tuned support resistance level.
So, for me, it is easy because, even with a lot of movements in the chart with a lower timeframe, I am still able to see where the key support resistance or where the key trend lines are. But for some of you, if you are not so well versed in identifying those key levels, maybe going up to a higher timeframe, let’s say if you’re a long-term position trading, going up to a higher timeframe or weekly chart, might be able to help you see those key support resistors more clearly.
So there is basically what I would think is the main reason for going multiple timeframes. If from one single timeframe you are not able to see enough information to how you make your trading decision, then you might want to try going into multiple timeframe.
Or, another example of multiple timeframe is, for example, you use the daily chart to look at the general trend. After that, you go down to a lower timeframe of, let’s say, four-hourly chat or hourly chat to look at, where are those minor support resistance level, mainly for entry trading setup purpose.
That means, you want to fine-tune your exact entry level. That’s why you go down to lower timeframe to find the most ideal exact spots to get into. So if you do not really need to get into this very, very specific point of entry and exit then you might not need to go down to lower timeframe.
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