As an equities trader, I teach and coach other traders how to find solid trading ideas. If a trader in my trading room or in a coaching session asks me about a certain stock, I always start from the bigger time frame: monthly and then work my way backwards–weekly, daily, 60-minute, 15-minute, 5-minute and 1-minute. Eighty five percent of the time I will find a point on one of the time frames that would make me not like the setup or give me a neutral bias.
PUT THE ODDS IN YOUR FAVOR
Time frame alignment is like stalking all the odds in your favor. I work with a lot of new traders and they are always so eager to find a trade idea and hit the button. My job assignment is to find high probability setups based off time frame alignment that sets up low risk and high reward.
TRADE LESS, MAKE MORE
My mantra is “trade less, make more.” Once you have obtained a predefined edge with setups, you will need to patiently sit on your hands and wait for clear setups or wait until the next day.
Using time frame alignment with trading setups is like using a sluice box to find the gold to your trading career. Relax, slow down, study, learn and follow the bigger trend off the larger time frame. The down fall for new traders is when they trade off the smallest time frame, “1 and 3 minute charts.” View all setups off the larger time frame weekly, daily, 60 minute then dial down to the 15 minute or 5 minute to find a nice entry point in your favor.
BOTTOM LINE
You will trade a lot less, get stopped out less, and your broker will get less commission from you.
