Find the Best Time Frame to Trade

Here’s a chart of QID in the 60-minute time frame. Looks bullish to me. I escaped from QLD and UWM holds overnight, and bought QID near the close. Higher lows and higher highs with a crossover of the 20ma. Maybe the market’s going to flush one more time before heading higher. 54 is possible. Stop out below the trendline.

I received an email from a reader. Amit asked, “I notice you are not trading as tight and technical as you were in the summer. Why the change? I thought technical trading was supposed to be consistent.”

Thanks for asking… and you’re right! Last summer’s market had a much better trend. Trading patterns worked better. They had a bigger trend behind them. The current market is full of way more chop and slop. You can’t trade with trending patterns in a market that is trendless.

Don’t get me wrong, those trading patterns still work, especially on smaller time frames. I’ve been posting a majority of daily charts where you have to use them much more conservatively. By conservative, I mean wider stops. Take the above chart. It’s the 60-minute chart of QID. The formations are much tighter than that of the daily below. You’ve got to widen stops on that daily. Today’s red candlestick really didn’t hurt the chart. Yesterday’s dip didn’t either. The last pivot Low should probably be used.

You’ll notice, I am trading using the 60-minute this time. Why? Because it’s giving me the best picture. That’s important. Here’s more input on trading in multiple time frames.