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.