Continue reading...Price Charts: Price charts represent the footprints of money, ie. peoples’ buy and sell decisions. Areas on any price chart where you see lots of trading activity suggests relative equilibrium in supply and demand. Areas on the price chart where you see little activity suggests supply and demand are out of balance; this is where price turns.
Time Frames: You can look at a price chart in any time frame you want these days. The purpose of looking at multiple time frames is the same as why a Doctor takes multiple X-rays when looking at a broken arm, for example. The 2 or 3 X-rays will all look different, but it’s still the same arm. Looking at multiple time frames helps us figure out where the real supply/demand imbalance is in a market as that is where price turns, which is where we want to buy and sell.
If you are a short-term trader making buy and sell decisions on a five-minute chart without paying attention to where price is in the larger time frame, my guess is...
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