Wednesday, April 25, 2012
multiple timeframes help find support/resistance points
What I can add today is a slightly new perspective -- by showing /tf on two timeframes, hourly and 1-min candles.
The /tf spiked hard on the AAPL report but no matter what you feel or think, resistance is resistance and if you were patient... the pattern emerged.
Had you taken this pattern you would have:
1) experienced no heat -- none
2) made anywhere from 35 to 45 ticks -- assuming you exited at the lows (the small double bottom was a nice clue to exit)
3) been done in less than 15 minutes.
Interestingly -- it was a strong up day... but this pattern emerges and often provides a great trade even if the market is going the wrong way. This is unusual but a big gap up likes to try to fill.
The key here is: Know your market you're trading and know the areas where resistance and support is. If you're not sure -- always go out to a wider timeframe. The market often thinks big and if you're only looking at 1-min candles.... you might overlook an obvious top.
Hope that helps.