Using Multiple Time Frames To Locate the HIGHEST Probability Trade Setups

As a technical trader/Chartist one of my "strength" is using MULTIPLE time frames to help locate the absolute HIGHEST quality trade setups. What i try and do is find the strongest setups that align in good and 'reliable" technical setups on MULTIPLE time frames for example a stock that is setting up well on the WEEKLY, DAILY and 60 minute charts make for the best setups and if executed properly, these can be nice trades. I try and make it a PROCESS where on EVERY DAY i am looking for the best setups that align on WEEKLY, DAILY, 60 minute and even 30, 15 minute time frame charts.
It all starts with the BIG PICTURE and ZOOMING down into LOWER time frames to help me "detect" patterns that are otherwise not easily recognizable in HIGHER TIME FRAMES.

Check out some RECENT example of setups i posted here on the blog, on twitter or some that i sent out to ART OF TRADING members .

Hope this helps and as always if you any questions, feel free to ask!  : traderstewie@yahoo.com

Cheers!

First Example: TSO 

The chart above is the original TSO Daily Chart (shared on twitter, posted on this blog and emailed to ART OF TRADING members) setup which was showing a CUP& HANDLE pattern: one of my personal favorite patterns and one of the most reliable ones i have found from my experience.

Here's the original TSO WEEKLY CHART (sent to ART OF TRADING members) which showed a very nice pattern similar to the one we saw on DAILY charts except on WEEKLY CHARTS is looked more "clean" and could see it more clearly to the trained trader's eyes.

Above chart shows the 60 minute TSO chart shows a very nice looking INVERSE CUP & HANDLE. This pattern wasn't very visible on the HIGHER TIME FRAMES but zooming down into the 60 or even 30 minutes charts, you would have able to spot some very bullish and reliable patterns to trade or at least alert/prepare you for a good move that was imminent.

Above is the updated 60 minute TSO chart AFTER the breakout.

Above is the updated TSO DAILY chart AFTER the breakout

 Above is the updated TSO WEEKLY chart AFTER the breakout.

Here's another example: TIVO

Above is the original Daily TIVO chart setup (shared on twitter, posted on this blog and emailed to ART OF TRADING members). Chart showing a decent looking ASCENDING TRIANGLE which tend to breakout to upside.

Above is the WEEKLY CHART of TIVO which shows a beautiful looking long basing pattern which broke out over 12.30 area and held it on retest. That was very important for this setup as it now creates yet another base from which it can now launch off over that 13.00 area. Strong bases make for strong(reliable) breakouts.

Above is the original 60 minute TIVO chart which was showing a solid basing pattern. Breakout was imminent. Only a matter of time. 

Above is the UPDATED TIVO weekly chart. breakout was SOLID and played out very nicely for those that played it.

Above is the updated TIVO daily chart. Notice how the MACD played a key role in spotting this setup and increasing the reliability of the play/

Updated 60 minute chart of TIVO after the breakout. 



I am going to make a new VIDEO on this topic soon but i wanted to do this blog post first as an "appetizer" to open your appetite on this very important topic especially for Technical traders.

Hope it helps.

Anatomy Of A Good Trading Plan

hey folks

Wanted to share with you all a written 'TRADING PLAN' which was created by one of the newer Art Of Trading members. I thought it was so simple yet thought out well enough that i wanted to share it here as i am sure many of you will find it useful and helpful. 

Enjoy! 

10 New Setups To Watch This Week

Note: make sure to check and re-check earnings dates on these stocks. 

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Respect Current Action By Studying Past Price Action

check out the attached SPX chart very closely. Many people are very surprised by the recent strength in the market's move up and i totally agree, its VERY hard to chase it and we ALL want a pullback to get into more aggressive longs and that WILL COME sooner or later. The purpose of this chart is to illustrate that this recent rally we saw that actually started in late December as the "fiscal cliff" fears dissipated. SPX went on a upside run in about 1 month of about 7% (see chart). 

This rally caught MANY off guard like many previous recent rallies. "Calling TOPS" becomes a very popular thing to do among traders and we are all victims of that as no one wants to be left "holding the bag" at the "top". 

Take a close look at the attached SPX chart and you quickly see that the type of rally we are seeing right now is NOT out of the norms. We have seen many like it and in most cases, we see SPX make a big run up with very minor "pullbacks". THe dips tend to be shallow and quick before new buyers come in and take it higher(much to most people's surprise). Calling tops becomes very frustrating for BEARS are want to short and reap rewards on down moves and also for BULLS who want decent dips to BUY. 

Its becomes a CHASERS market. Take a close look at what the SPX did exactly ONE YEAR ago where i recall vividly an almost identical scenario as what we are seeing right now. SPX did indeed "top out" but look at WHERE and WHEN it "topped" out! After a 16% STRAIGHT UP run(very tiny fast pullbacks) and 3-4 months after it started in late December/Early Jan. 

Are we seeing a similar scenario now?? Obviously hindsight is always a beautiful thing but as of now, i am seeing an eerily similar move to the one we saw exactly one year ago.

Let's not get ahead of ourselves and take it ONE DAY AT A TIME. Lets see where and how things go from here. My goal right now is tune out as much as "noise" as possible as everyone usually has an opinion but the only one's that matters is the MARKET'S so I'm going to trade with the market's flow by taking new trades as they emerge and setup whether it be in BULLISH or bearish patterns.

Benefit of doubt goes to the BULLS right now regardless of how "overbought" we are. Just like "oversold" can become more oversold, Overbought can become more overbought. 

Which Forex Technical Indicators Are the Best?

From a technical analysis perspective, I prefer to base my trading decisions primarily on the ongoing dynamics of supply and demand principles, says Sam Evans of Online Trading Academy, because this is pretty much the most objective analytical approach available, mainly due the simple fact that the very best indicator of where price is likely to go next is price itself.

However, while this approach formulates the core methodology of my trading plan and activities, I also deeply respect a handful of the other technical tools and analysis methods that are widely available to traders of all skill levels. Sure, I would never just take a trade based purely on a buy or sell signal generated by a technical indicator alone, but with this being said, these tools can provide a powerful role in aiding the overall market assessment process. As traders, we simply need to understand that there is absolutely no such thing as a leading indicator. There is no perfect trigger available, and until machines can consistently predict the future, then things are unlikely to change anytime soon.

Two Categories of Indicators
I have found in my experiences as a trader that while there is undoubtedly a huge selection of technical indicators built into most quality trading and charting platforms, after time experimenting with them all it becomes clear that where most are concerned, they can be divided into two separate categories: Momentum based and oscillator based, with the former more widely used for the most basic buy and sell signals. Occasionally, when a dominant trend is in play in the marketplace, just relying on support and resistance levels alone means that much of the trend is lost to the trader, thus forcing them to sit on their hands and wait for a better time to enter the market. However, by using an oscillator from time to time during these scenarios, the objective and patient trader can often be given a chance to step into the action, ideally when looking to short rallies in downtrends or buy pullbacks in uptrends.

The most common of the oscillator family of indicators would include the likes of the RSI (relative strength indicators), the CCI (commodity channel index), and Stochastics. I have worked with and continue to teach my students in the Online Trading Academy classroom and ongoing Extended Learning Track (XLT) graduate program the benefits of these tools when used in the right circumstances (and only the right circumstances I might add!).

The oscillator anyone chooses to use is really entirely up to personal taste, but I would never recommend using more than one at a time purely for the reason that in essence, all three do exactly the same job. While the RSI is formulated based on relative strength of price, Stochastics are instead based on systematic higher and lower price closings. The CCI computes its results from the change in price in comparison to previous price fluctuations. So, while each individual indicator has a slight difference in its calculation method, they all have the common thread of showing a trader signs of when a market is potentially "overbought" or "oversold," leading to some key potential opportunities to join the current trend.

Each indicator is formulated from the price data itself, so we must always remember that often the indicator can give us a very late entry signal, therefore increasing the risk and draining the reward potential simultaneously. There is, though, a solution to this problem with all oscillators and that resides with the actual amount of price data the indicator is programmed to work with. You see, no matter the technical tool to be used and its own bespoke method of calculation, they all need a certain amount of price data to function. This setting can often be found labeled the period of length setting, depending on the charting software being used. Typically, the default setting is the original amount of data used for the calculation, as was first intended by the indicator's creator or designer.

As a rule of thumb, I encourage students of the market to use the default setting when working with an indicator of any kind, as this was the original setting employed by the tool's creator and is a good average to work with. We can, however, change the period setting at will, either speeding up the amount of entry signals given by the indicator, or instead adding more periods to provide fewer buy and sell triggers.

By: Sam Evans

Instructor, Online Trading Academy

MORE ON: FOREX

NEW Stock Ideas To Watch

 DELL: Technically starting to show hints of a bottom. HIGHER LOWS with accompanying HIGHER VOLUME up days starting to manifest in the DELL daily chart. Keep an eye on this.

 AEGR: Strong trend up: consistent volume patterns with HIGHER Volume UP DAYS followed by small controlled low volume dips to test Moving Averages. New Breakout looks imminent.

 HOG: Who doesn't like a Harley... Enough Said!

 BYD: casino stocks have been ripping big time. See charts of WYNN, HAR, MPEL and LVS. BYD has clear resistance near the $7 spot. Volume patterns building in very bullish manner. Watch for a breakout over 7.00 to 7.10

 HP: Oil drilling sector seems to be getting some love lately. Watch for a breakout soon.

 WDC:  from the data storage sector, STX announced killer earnings today/ Could be helpful to WDC. Volume patterns showing very bullish action last few weeks.

 VALE: A Brazilian Mining play. Volume patterns healthy with big volume up days and low volume controlled pullbacks. Pulled back last few days and now appears to be stabilizing above the rising 20 day MA.

 YPF: Argentinian ADR in the Oil and gas Sector. Momentum looks strong and looks like it wants more. Fast Mover.

X: US Steel in the recently HOT steel sector. posted original setup from the $22 base breakout. Now looks to be BULL FLAGGING.

Note: make sure to check and re-check earnings dates on these stocks. 

For ART OF TRADING Reviews Go HERE!! 

JOIN US FOR A 14 DAY FREE TRIAL TODAY!!

ART OF TRADING.net