Long-term bar chart analysis

Earlier we examined how we determine the trend in the short-term time frame (on a bar to bar basis). In this section we will look at the bigger picture and apply a similar concept to a longer time frame.

Longer time frame trend analysis

It is very important for all traders to be aware of trends in multiple time frames. Trends in higher time frames tend to have a larger effect on the movement of price action within a certain direction. It is better for a trader to be in unison with these larger trends, which exert a greater force on the market, than to trade against them. By trading with the higher time frame trends, traders will receive a greater ‘bang for their buck’ because the lower time frame swings of trends in the direction of the higher time frame trend will generally be greater than the lower time frame swings of trends against the higher time frame trend. In the higher time frame, the lower time frame swings counter to the higher time frame trend will tend to be ....