I am not a fan of multiple time frame analysis. Markets have
no time frames. It produces a continuous stream of data from open to close. We
chop it and chart it as per our own convenience. Candles and resultant patterns
will differ as per the charting method.
This logic is not applicable to ‘Daily’ charts in respect of
a day market. Here there is no question of chopping. They are for real and all
the traders watch the very same levels.That is why levels like PDL,PDH and PDC attracts a lot of
order flow. These are simply the High Low and Close of the previous day candle.
Every ‘Day candle’ is considered as a range. Price breaking
out of this range is a major transition. Price moving above PDH and falling
below PDL are important events. Breaking the PDH is a bullish event and a break
down below PDL is very bearish.
Decision Point method works well when the day traders are in
control of the market and fortunately most of the days they do. But it is
important to know what the positional and investor side of the market is doing
and its impact on our trades. The easier way is to have a look at the daily and
see whether it is in a rally mode or in a decline mode. In other words look at
the micro trend in Daily chart. (Read More)
When market is in a rally mode, buying range lows can be
more rewarding and in a decline mode selling range highs are preferred trades. Be
very careful while shorting rallies and buying on declines. Focus on PDL on
rallies and monitor PDH on declines. Break of these levels will change the
trading mode.
If market trades within a candle for the next few days this
will create a Master Candle and this MC may act as a range. Pay attention to
the MC extremes also.
Do not forget to take your daily dose. It is very important for your financial health
