Change Time Frames For Full Picture

Hey Market Pilots,

The old saying “you can’t see the forest through the trees” means that sometimes you are too close to see the bigger picture. When you are in the middle of the trees, you can only see for a short distance and you don’t know if you are in a massive rain forest or just a small patch of foliage. The same can be said for stocks. If you are down on the five-minute chart trading all day, you may forget the bigger picture of what the stock is really doing on, say, the monthly or weekly time frames. 

Right now, I am not operating on the five-minute charts, but I am certainly on the hourly and daily. These may seem like big enough time frames to tell you what’s going on, but maybe not when the trend isn’t clear or the stock is going through a bigger change.

I tell my subscribers that I always look at the monthly and weekly time frames before ever putting on a trade. This is because I need to see the bigger picture of what is really happening. For example, Adobe (ADBE) had been going sideways for months and it mostly looked like chop on the lower time frames. But if you were to examine it on the monthly or weekly time frames, you would see that it was simply flagging to support from a moving average, just on a larger scale.

So within this view, ADBE (pictured above) bounced off the monthly 10 simple moving average (SMA) and the weekly 50 SMA. Look around at some of the names you trade, step back, and get a clearer picture of the forest to help you navigate through the trees.

Your Profit Pilot, TG


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