Market Analysis for Dec 20th, 2019
By
Ryan Wilday
This question is response to a request. From Dog-mom:
Good morning. How about an educational request? Can you talk about choosing what timeframe chart to look at for current EW moves? Not for scalping, but for analysis of technical indicators and if GBTC is likely turning back down for this move. For instance, BB width and %BB are pretty different between 15 minute and 2 hour charts. Similarly, MACD and intensity can also look pretty different. On your nightly reports your shorter interval charts typically vary from 15 minutes to 2 hours, so not sure what might be optimal for trying to predict whether there may still be some upside in current move. Understand the increased buying power with getting back in at lower $. Have liquidated about 50% of original and also have some original unallocated capital held back for lower entry. Thanks
My summary answer is I set the timeframe to see what I want to see.
1. With repect to EW, there is no law. You just need to be able to see the waves clear enough to evaluate them. For example if evaluating whether something is impulsive, I zoom in enough to see if it has five waves and following fib norms for an impulse.
2. If I am evaluating MACD for divergence, which is usually done on 4ths and 5ths, the MACD needs to show the same ups and downs as the 4ths and 5ths so i have to set the timeframe to see those same waves in MACD.
3. When trading, I think setting two to three timeframes you like to see if one timeframe maybe fighting another.
4. With respect to the BB trade I scalp the 5m when the 15m BBs are compressing, and 15m when 1Hr is compressing. When the 15m or 1H BB width can be bottoming, I look for a momentum play in the smaller timeframe.
5. Trends occur in different timeframes concurrrently. You can have a daily chart in an uptrend while the hourly is down. This is helpful for deciding what sort of trade you are taking, short term or long term.
Let's use an example of trading with timeframes. I hear many people say about Bitcoin, 'I just HODL' well, in trading that means you are trading the monthly timeframe right now because the daily and weekly are in downtrends.
I hope that makes sense, but maybe there are just more questions.
