In the formative years of my trading career (late ’90s), I frequently found myself scratching my head over an interesting problem.
Put simply, I was missing the “big picture” and it was� destroying my trading profits until I fixed the problem.
Although I have my own, rule-based swing trading strategy, which has been thoroughly explained on this blog and nightly newsletter over the years, my trading system is just one of many types of successful trading methodologies out there.
If you too have been making the same mistake of hyperfocusing only on the daily charts, read on to find out why you’re missing the big picture of what’s really happening with the stocks and ETFs you trade.
On the weekly chart, notice the 10-week moving average is trending lower, but� the price is still holding above the 40-week moving average. The 10 and 40-week moving averages are similar to the popular 50 and 200-day moving averages on the daily chart.
The $XOP daily chart shows last week’s price action holding above the prior swing low. If this low holds, the price action can begin to set “higher lows” with the base and form the right side of the pattern (learn more about base building patterns here).
On the contrary, the “big picture” provided to you by MTF analysis definitely shows a dominant, long-term uptrend in place. Pullbacks and consolidations along the way, such as shown on this daily time frame, are completely normal.
There’s no doubt in my mind that utilization of Multiple Time Frame Analysis will substantially increase your trading profits…but only if you make the decision right now to start applying this underrated technique to all your stock chart analysis.
To profit from swing and position trading the best ETF and stock picks (using our precision MTF analysis), subscribe to The Wagner Daily now.
Thank you, my last few trades have been losers and now I now why. I was starting to fall into that hyperfocusing mode and no looking at the bigger picture. Your timely was perfect.
Thanks for your comments. Glad you enjoyed the article.
After the big sell-off of January 24 (which followed several days of higher volume selling), it may be time to lay off the gas pedal with new trade entries for a while. Nevertheless, now you can remember to look at the “big picture” when it’s time to buy stocks again.
Don’t worry about the typos (it’s not a grammar blog). Your input is welcome anytime.