Short term trading typically uses a 3-6 month daily chart, a 30 or 15-minute chart, a 5-minute chart and a 3 or 1-minute chart to spot a high potential trade and time the entry.
When the momentum slows down and markets channel sideways, look at other strategies to sustain your trading business. All of these strategies are taught at WealthBuildersHQ and are available at the beginning level to the advanced.
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* The third quarter, everyone “Goes on Vacation:” and the market is basically flat or drifting sideways or slightly downwards This might be considered the lazy, hazy days of summer.
Directional trading strategies do well in a trending market. You will find larger momentum moves in the futures markets in a trending market.
Take a look at the fiscal year as a time frame too. The market is cyclical.
Not all strategies have the same potential rate of return, but sometimes a strategy with a lower rate of return is better than no rate of return. Something to consider.
* The fourth quarter rolls around and all are “back in school”. The market momentum picks up and we start into more trends.
As traders in the ever-changing market(s), it is always wise to look at different time frames.
* Typically the first quarter of the fiscal year has the most momentum creating trends to trade.
An even grander view of the financial markets can be measured from decade to decade or in Bull and Bear market cycles.
* The second quarter brings us the earnings from the first quarter which continues some of the momentum but you can see the beginning of slowed momentum.
When the momentum of the market changes, it makes sense to change trading strategies.
When the momentum slows down and markets channel sideways, look at other strategies to sustain your trading business.
In a trending market, shorting or buying stock works well. Directional trading strategies do well in a trending market. You will find larger momentum moves in the futures markets in a trending market.
Long-term trading or investing uses a 12-36 month daily chart, some may look at fundamentals as far back as 10 years, and look at 6-3 month daily chart to spot good trade candidates and time the entry.