Trade on Daily Chart

Beginner Questions
1

Hi Guys

need advice from you all. How do you trade on a daily chart ? to be precise:

  1. how do you plot your trendline and S&R ? On monthly, Weekly or Daily Chart ?

  2. How to determine is it range or trend ? If monthly showing range (200-300 pips) but weekly and daily show trend, do we enter trade

  3. When do you enter your trade ? If you trading on Daily chart , do you view lower timeframe to enter ?

2

I don’t trade from daily charts, myself, and can therefore answer your questions only in terms of “general principles of relative time-frames”.

Personally, I plot only horizontal trendlines, which are S/R.

I plot them on charts representing a couple of higher time-frames than the ones from which I’m trading, and then carry those horizontal lines over onto my trading charts, adding more there.

I attribute greater potential significance to lines with (a) multiple touches and (b) recent touches.

Both are fairly easy to see, just from looking at the charts. Ranges are characterised by periods of trading between two horizontal lines with multiple touches of each. Trends are identified by higher/lower highs and lows (higher highs and lows for an uptrend, and vice-versa for a downtrend).

[I]Be aware that a “trend” is something that exists only within a specified time-frame and with reference to that time-frame, and that it’s quite common for an instrument to be trending in one direction in one time-frame and in the opposite direction in a different time-frame.[/I]

Two ways of determining whether or not there’s a trend within a specific time-frame …

(i) Good method: print the chart, pin it on your wall, and look at it from a few metres away: if you can’t see a clear trend, there probably isn’t one in that time-frame;

(ii) Not quite such a good method: draw simple moving averages representing 15 and 50 periods. If the MA-15 is above the MA-50 and both the lines are [I]rising and diverging[/I], there’s an uptrend within that time-frame; if the MA-15 is below the MA-50 and both the lines are [I]falling and diverging[/I], there’s a downtrend within that time-frame; if neither of these sets of three conditions applies, then there probably isn’t a real trend within that time-frame.

I don’t know. I don’t define anything in terms of numbers of pips, because it doesn’t take volatility into account, and doesn’t in itself signify enough to help me.

I enter trades from the lowest time-frame I’m looking at.