If you are a swing trader, you should definitely check out the 60 min charts. They help you to find a better entry point as well as discover trading opportunities. A trader needs to be very specific with his entry and exit points. Therefore, it is very beneficial to look at a lower time frame to help you to refine your entry and exit points.
Whether you are a swing trader, a position trader, a day trader or even an investor, you will find it beneficial to look at the 60 min charts. Many traders look at the 60 min chart to find opportunities and as an early indication of a trend change in the daily charts.
So, if you want to be more accurate in your trading or investing, take some time to look at the 60 min charts of your stocks. You will discover many many things that the daily charts and weekly charts cannot tell you.
One of the great ways to use the 60 min charts is to use it as a tool to time our entry for swing trades and even position trades. A swing trade is where you enter a stock for a few days before disposing it. A position trade is where you hold the stock for a few months.
A swing trader will use the daily charts to spot a setup. Then he or she will go down to the lower time frame to find the perfect entry.
In the chart above, we can see how EXR formed a double bottom in the daily chart. In addition to the pattern, the stock was forming a bottoming tail and it was trying to break a downtrendline. This provided the perfect setup for swing traders to enter for a long position.
In order to be certain of the best place to enter, the swing trader will look at the 60 min chart to help them time the entry. The above chart is what the 60 min chart of EXR looked like. Notice there was a bottoming tail in the 60 min chart as well. In addition to that, the stock was breaking a downtrendline in the 60 min chart.
Some traders will jump in when the stock trades above its 60 min 20 MA. Others will add when the stock trades above the 60 min 50 MA. Do you now see how beneficial using the 60 min chart can be? Those who only use one time frame to enter or exit a stock will have a big disadvantage compared to those who do Multiple Time Frame Analysis.
The 60 min chart can also be used by traders to exit a stock before a major collapse happen. That's because stocks tend to top out in the lower time frame before it tops out in the higher time frames. What happens in the lower time frame can often give the astute traders an early warning of when to sell a stock and book a profit.
The chart above shows the daily chart of Starbucks. A very popular coffee company that has many customers loving their products. Starbucks formed a flag pattern or break downtrendline at support. The stock was also touching its rising 20 MA. It was a great setup for a nice swing trade. You will notice that this stock gapped down after moving up for sometime.
That's because earnings came in and investors did not like the sound of it. So it gapped down because of unmet expectations. I have a feeling it will most likely move back up because of the strong support below.
Anyway, traders who took a look at the 60 min charts would have known that it was a bit risky to hold onto the stock into earnings.
The chart above shows the 60 min chart of Starbucks. There were a few signs that told traders it was time to lighten up a bit into earnings. First of all, is the measured move target. When we project the last move up from previous breakout base onto the current base in the 60 min, it gave us a target of around $61.50. The stock met the target as it approached earnings.
Secondly, SBUX broke an uptrendline in its 60 min charts. This hinted to traders that the momentum in the stock is slowing down. Thirdly, the stock was beginning to challenge the 60 min 20 MA and drop below it once. Although it quickly rose after that, it meant that the stock is getting a bit tired after a long nice run. It was clear to observant traders that this stock is tired and should correct for awhile. Best to take some profits off the table.
The 60 min chart in itself is a fertile ground where traders can find trading opportunities for swing trades. A trader can find a continuation pattern or a breakout pattern in the 60 min charts and buy the stock holding it for a week or two and selling it off for a nice swing trade.
In the chart above, we can see how ATVI provided a nice swing trade setup. ATVI broke a 60 min downtrendline. It then had a bullish 20 cross 50 MA and once it broke above the consolidation, traders could have jumped into the stock for a nice trend trade.
The above chart is the daily chart of ATVI. The stock was in a solid uptrend and therefore it was conducive for the swing setup in the 60 min chart.
If you work off the daily charts, never underestimate the power of going into the 60 min chart to have a look. Whatever time frame you usually trade in, it is best to take a look at other time frames. Look at one higher time frame and one lower time frame. It never pays to be only a one dimension trader. Good traders and investors look at multiple time frames. Not many people do that. Perhaps that's why only 7% of people who try trading succeed.
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