One "trick" I often use when plotting charts for the overall market, i.e. $SPY, $QQQ, $IWM etc. is examining, studying and trading multiple timeframes.
I not only look at the DAILY or weekly charts to try and gauge what's going on with the "overall big picture" to hopefully try and spot PATTERNS, trade-able, actionable patterns like "CUP and HANDLE" patterns, "Head and Shoulder patterns", "Inverse Head and Shoulder" patterns, Falling Wedge patterns, Bull Flag patterns etc...
But, most importantly, I also use SMALLER time frames such as 60 and 30 minute time frames to try and spot HIDDEN patterns that aren't visible by the "naked eye" when looking at the Daily or Weekly time frame charts! Smaller time frame allows you to zoom down, just like a microscope and look at the "DNA" (genetic make-up) of the chart if you will! If you know what I mean?
Take a look at the attached $SPY chart below: AOT members who visit the 'Power Earnings Gap' (PEG) watchlist often, probably recognize this chart! I've kept it and keep it on there permanently! I have even posted it on twitter a few times....
So if you have seen the above chart in the PEG watchlist, then chances are you have probably seen this $SPY chart attached below as well!
It's the SMALLER TIME chart of the SPY: the 30 minute time frame chart to be exact!
Note, the CLEAR bottoming "Inverse HEAD and SHOULDER" bottoming pattern that emerged back in early April!
As a matter of fact, I was using this chart and this exact bottoming pattern. It was only truly visible using the 30 minute charts. This was a signal for me to move out from 100% cash and start to play more LONGS at that time. Notice how difficult it is to see that "Inverse HEAD and SHOULDER" bottoming pattern on the DAILY charts? Actually, the daily chart during the late march to early April time looked like a COMPLETE mess!
But once you zoom down into the smaller time frames you've just uncovered a beauty of a bottoming pattern and boy oh boy, did it ever play out!
--------> Fast Forward to mid May - Early June
Now, notice how this spot on the same 30 minute chart also uncovered a near PERFECT "Inverse Head and Shoulder" pattern?
I urge you all (every single trader!) to add this KILLER weapon to your trading arsenal, folks!
Use SMALLER time frames (15, 30, 60 minute charts) to unlock hidden patterns that aren't visible on the daily/weekly charts! Get that EDGE! "The edge", a thing that so many traders talk about and want is often found in the smaller time frames! This is a great way to spot and get into patterns ahead of the masses because you were shrewd enough to zoom down into the smaller time frames and do some "gum-shoe" detective work!
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