And this video, I'm going to talk about multiple time frame analysis, so when you're looking and trading
a stock and this is especially true when you're talking about day trading, multiple time frame analysis
is absolutely crucial.
So the first thing you need to determine is what is the trend?
In other words, is the market gradually going up like we see here on the Apple daily chart or.
Is it gradually going down like we see here on the Deutsche Bank chart, you can see clearly over the
course of the entirety of twenty eighteen so far, the market has certainly been selling Deutsche Bank.
So that in and of itself gives you the overall bias.
There's also something called consolidation, which you just simply timeframes of a cycle, if you will,
where the stock really isn't going anywhere.
So, for example, each one of these candles represents a day for a couple of months.
Apple really didn't do anything.
And that's called consolidation.
This will dictate.
Exactly how you approach a stock, if you will.
One indicator that we will talk a lot about in this course is volume, you can click on indicators on
the trading view platform and then go to volume.
Just click on that and you're good to go.
And you can see that the volume shows up at the bottom of the chart.
It's color coded by the candle.
So this was a green candle, for example.
So that's a green bar.
The higher a volume, the better off you're going to be, especially day trading.
So watch what happens.
This is an hourly chart of Apple.
We go ahead and put that volume back on.
You can see the volume lower, of course, because each one of these is an hour, not a day, but watch
what happens.
It shows on certain candlesticks much more volume, and then gives you an idea as to how the market
participants truly participated in that particular candlestick, for example, gives you an idea of
conviction, if you will.
How to use multiple time frames?
Well, that's essentially what we're looking at here.
We're looking at a longer term uptrend and there is for those of you who know anything about patterns,
there is a pennant forming, which is a bullish pattern.
We're in an uptrend.
So when you look to Apple on the short term charts and then this case, it's an hourly chart.
It could be any time frame, 15 minutes, five minutes, whatever it is you're dealing with, you need
to be looking for by signals, candlesticks that tell you, hey, it's time to get involved in hopefully
with an extreme amount of volume as well that typically will lead the way.
So now that we know what we want to do and which direction we want to take the chart, we then can ignore
selling opportunities because we know that they are less likely to succeed over the longer term.
When I mentioned previously that we were in an uptrend, then you start to look for signs perhaps like
an inverted hammer here, that's a candlestick breaks to the upside.
And once you break that, that's a good sign and you can see that we have gained from there.
So that's just one example.
And this is all based upon the fact that Apple has been rising over time.
That means there's much more interest and much more volume to the upside.
The larger institutions are getting involved.
And therefore, even though it had been choppy for a couple of weeks, it's still over the longer term.
On the early chart, as you can see, has paid to be long of Apple, not short.
Here's a 15 minute chart.
See, it looks pretty gruesome there, but when you start to fade out, it's a completely different
scenario.
And you can see that, again, even with these nasty pullbacks, it's still over the longer term, you
continue to do better and remember to the upside.
And remember, that's exactly what this is about.
This is about playing the odds.
You're never going to get it.
All right.
So as a quick example, before we cut out of this, you can see that there's a gap there.
And when you blow through gaps, typically there's a lot of selling pressure there.
And you can see that we did have a pretty negative move right there.
When you return to the gap and you blow through it, that's a very bullish sign.
So, for example, above two 24 might be a very interesting place to buy Apple because you have the
weight of the market longer term with it.
And it is a bullish technical signal.
Again, though, volume helps.
And I would urge you every morning before you start placing trades, look at the longer term charts
and pay attention to whether we are with the trend or against the trend being against the trend.
Really not a very smart thing to do.
Deutsche Bank, as you can see, has broken down.
Multiple times shooting star right into a gap, selling opportunity, but you could even go as far as
going down to the one hour chart and start looking for selling opportunities at this point, if we blow
through this gap, that would be a negative sign.
Probably have short sellers coming into play.
Now, I will point out volume is crucial on a multiple kinds of levels, not the least of which is getting
in and out of the stock.
As a day trader, you do not want something with a spread that's going to be five or 10 cent a less
liquid stock.
A day trader is going to want to be able to get in and out, not lose six ticks, trying to get filled.
That's also important.
So day traders tend to stick the larger stocks, such as Apple or the S.P.I or a JPMorgan, that type
of stock.
Stick around.
We'll talk about support, resistance, trading strategies next.