Should I give Weightage to Lower or Higher Timeframes?

Another sort of questions arising while trading/investing based on multiple time frames. Which time frame should I prefer when adopting a trading system? And Weightage should be given either to shorter time frames or Longer timeframes if we are looking for trades/investment using multiple timeframes?

I think giving weightage to shorter timeframe will save us from any sort of major loss most of the time if the trend is going to change against out trade. Level of Risk could be very low when adopting a shorter time frame strategy. Here are some of the profiles which suits for varity of traders/investors in the market to make a earlier entry and exit in any kind of trade.

Points need to consider while trading/Investing

An intraday trader should give more weightage to 5 min chart and 15 MIN Signals than Hourly Signals

BTST Trader should give more weightage to 15 min Chart than hourly or Daily Signals

And a Positional trader should give more weightage to hourly than daily or weekly signals

And a Short term investor should give more weightage to Daily than Weekly Signals

And a long term Investor should give weightage only to Weekly Signals.

Things to Avoid

Avoid taking an intraday trade based on DailY/Weekly Signals

Avoid giving preference to signals like overbought/oversold as these factors can extend as long the trend remains intact

Also try to avoid watching the development of divergence when you are trading with lower time frames like 5min,15min charts

I would like to hear more on these from you.

Related Readings and Observations

Rajandran R

Rajandran is a trading strategy designer and founder of Marketcalls, a hugely popular trading site since 2007 and one of the most intelligent blog in the world to share knowledge on Technical Analysis, Trading systems & Trading strategies. More From Rajandran R »

4 comments… add one

  • Kesavan April 5, 2010, 1:39 pm

    Very good tips.

    Reply
  • Sandew April 30, 2010, 9:40 pm

    for intraday, set up must be scanned on 60 minutes and then switch to lower frames, keeps you with the trend.

    Reply
  • Manu Adam August 29, 2011, 12:33 pm

    Dear Sir, I really admire your grt expertise in the matter of technical analysis and keen reader of all your columns. I would be very grateful if you could help me sort out my problem – On Intraday realtime chart Indicators show very late.
    I am puzzled how to show indicators on Intraday chart from beginning. I mean, when market opens I open the chart – at 9.15 a.m.. but no indicators are visible on chart till late, not even EMI (5) on a One-minute chart. Indicators start getting visible only after 20 candles .. that means – on 5-min chart indicators become visible after 100 minutes (20candles x 5) and on 3-min chart they become visible after an hour. That is troublesome – how can I do trading in the beginning hours if indicators take so much time to be visible? I tried with indicators like RSI (14), Stochs (14,3) CCI (14) and EMI ( 5/13 ). None start showing on chart till after 20 candles of price move. Perhaps there is something seriously wrong in my setting or the way I am doing thing. I am using Ninjatrader 7 with yahoo connection for Real time Intraday chart – getting data regularly without delay. But somehow indicators do not show up. Please Help so that I could get indicators working from the very beginning (as I see on most charts). Dear sir, Please guide me.

    Reply
    • Rajandran R August 30, 2011, 7:00 pm

      Hi Manu Adam,
      The only problem could be Backfill is not available on intraday charts. Check whether your ninja trader support bacfill or either the backfill settings are correct.

      Reply

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    • Rajandran is a Market Analyst and founder of Marketcalls, one of the most intelligent blog in the world to share knowledge on Technical Analysis, Trading systems & Trading strategies.