Rognvald,
OK. As I said I'm not familiar with SMI or it's "personality" and I wouldn't normally comment on stuff that I haven't looked at. However, simply for the sake of discussion:
Firstly, my longest time-frame chart would be a daily chart. I would use this to determine both overall trend (or lack of it) and major support & resistance.
I wouldn't use two minutes for trading since it would give me a headache (but that's just personal choice). Also, looking at your 2 minute chart, it doesn't "shape up" particularly well. By that I mean it doesn't look to either congest or swing well viewed in two minute bars. I can't get any intra-day data up on smi so I can't have a decent look to observe what 2 minute charts look like over the longer term. You are obviously familiar with it, so it probably "shapes up" fine to you.
My preference would be to use your 10 minute chart for trade entries since that seems to "form" better patterns, i.e. swings and congestions.
Which leaves the 60 minute as an intermediary time-frame/reference. I would use this mainly to derive short - medium term support / resistance.
So, back to your original point, i.e. how to use them all together.
Firstly I would look to the daily chart to establish some context.
1) SMI recently broke out above the triple top @5145.
2) Fourth time through is a low risk trade anyway but combined with the slingshot/rising bottoms pattern below 5145 a long in
anticipation of breakthough looked particluarly low risk.
I realise that you were asking about the last couple of days and the breakout took place in December and so is not relevant from a trading perspective looking back over the past few days. It was significant and worth a mention though.
OK. Last few days then. Well again, looking at the daily chart, the breakout (for me anyway) would have established an UPTREND. Normally, were Mondays low at 5496 to be taken out then I would consider smi back in a downtrend. However, with clear support the triple/quad top I would wait for that to be clearly breached before assuming a trend reversal.
So Monday, was day two of a pull-back in an uptrend. Any shorts taken would be counter-trend trades and treated accordingly with smaller position size (if taken at all). Any longs would have been trading with the trend and treated accordingly with full position size.
I would be looking at the 10 minute chart on Monday for a long entry with the trend. Since Monday was essentially a down day in an up-trend that, for me, means looking for a reversal pattern intra-day on the 10 minute chart, i.e. either a double bottom or a 1-2-3 bottom.
As it happens, a 1-2-3 bottom looks as if it was formed when the gap fill (from 5508-5461) failed so that would have got me long. I'm sure there were opportunities to trade short using a 2 minute chart, just not for me. And, as I said, any shorts would be counter-trend trades.
My plan with this trade would be to hold the trade in anticipation of a break of the intra-day high (i.e. up-trend continuance) at which point I would get rid of some.
On Tuesday I would again be mainly looking for longs. I might get rid of my long held overnight if there was an intr-day trend reversal pattern, i.e. double top or 1-2-3 top. Otherwise I would be holding it. Looking at the 10 min chart for Tuesday it looks as though there was an intra-day double top (getting me out of the long). Might have been short, might not. Can't say. I'm not very good on counter-trend moves so I probably wouldn't have been.
Wednesday saw an intr-day 1-2-3 bottom pattern from at the open which would have provided the opportunity for a long with the longer time-frame trend (still UP). The immediate target for any long would be Tuesday's high, at which point I would take some off and carry the rest again overnight.
So, for the sake of discussion, that shows a very simple form of multiple time-frame trading.
I didn't mention the 60 minute chart because when I actually looked at it didn't give me any extra information. Sometimes they do, sometimes they don't. Nor did I include any daily support resistance other than previous days high/low.
I could (and normally would) use daily closes and weekly highs/lows for example.
