When Trading 5 Minutes It Pays To Listen to 60 Minutes!!!

Take a look at the 60 minutes chart of Nifty. What do you see? Patterns and clear Divergences? Right! It’s a mistake I often make when I day trade some times. I just don’t very often (rather I am lazy) look at the higher timeframe than the timeframe (5 minutes for intra trades and dailies for swings) I trade. As a result I have lost many a trading opportunities or rather I have closed my winning positions for a token profit or some times even at a loss. If only I had enough sense to look back at the higher time frame I would have made good trades. No point in crying over spilled milk. I know it’s always easy to see the middle of the chart and do your trades but what matters most is the hard right edge! Why I keep annotating my charts? Because it is helping me, in deciphering patterns and training myself to identify them in the future, as and when they occur. Speaking of Patterns lets recap what all we see in this chart;

• On the left we had clear Double Tops confirmed by negative divergence in the MACD. The Logical target was achieved in fact we exceeded the target.
• In the middle right from March to mid April we saw two very bullish patterns; an inverse Heads&Shoulders and encompassing it was a large symmetrical triangle. In this case also the logical targets were met.
• Now coming to the hard right edge we seem to have made a flag. And if you look at the chart in its entirety we can see a large rounding bottom, probably we might make a cup and handle or a huge inverse Heads&Shoulders with two tiny shoulders and a huge head but all that confirms if we break 5350.

I know the last point about the entirety is a bit too much of optimism. But as they say Technical Analysis is more about probabilities than certainties and the least we can do is get our probable scenarios right. For me a lesson learnt that it pays to look into the higher time frames than what I trade, be it 5 minutes or dailies. After looking at these kinds of charts sometimes I wonder do we needlessly make our Technical Analysis difficult. Or is it just that the hindsight is 20/20?