In the world of trading, context is everything. Many traders fail because they look at a single chart in isolation, missing the broader "tides" of the market. , a seasoned analyst and founder of Alphatrends, revolutionized how retail traders approach the markets with his seminal work, Technical Analysis Using Multiple Timeframes [2].
This is the ideal environment for long positions. Traders look for daily breakouts, then drill down to 5-minute charts to buy pullbacks to the rising 20-period EMA or daily AVWAP. Stage 3: Distribution In the world of trading, context is everything
When traders focus on just one time frame, they blind themselves to the bigger picture. A daily chart might look exceptionally bullish, prompting a trader to buy immediately. However, looking at a 15-minute chart might reveal that the stock is severely overextended in the short term, leading to an immediate drawdown right after entry. This is the ideal environment for long positions
Volatility shrinks, and the moving averages begin to flatten out. Smart money is quietly buying shares. Stage 2: Markup A daily chart might look exceptionally bullish, prompting