August 23, 2012 at 11:42 am | | Comments 0

Trade Multiple Timeframes

This market has definitely favored the bulls since the June low. During that time, the S&P 500 has risen more than 11%, which isn’t bad at all in just 2 1/2 months. Every single dip has been bought, and those who have been stubborn enough to attempt to short sell pretty much anything for a timeframe longer than a quick scalp have faced a stiff headwind.

The market’s been strong – you just can’t deny it.  The real money has been made on the long side, and there have been multiple timeframes which have been paying off nicely. We’ve seen days with bursts of strength for the intraday player, as well as multi-day and multi-week advances which have favored the swing trader.

This idea of trading across multiple timeframes is something I put a great deal of emphasis on, and lately that’s been one great way to diversify as a trader. That’s why it’s such a big element of what we teach.

Bread, Butter, and Gravy

The swing trades shared in our stock pick service are what we tend to focus on most – they’re our bread and butter. Generally, we hold them for a few days up to a couple of weeks. They provide larger moves but sometimes take a little more time to develop. We like to buy stocks coming out of defined chart patterns like bull flags or triangle patterns, and it works to our advantage.

For example, here are two setups which took a few days to make their moves, but which provided us with some quick profits.

One is LVS, which we entered at $39.75 as it cleared the descending trend line on 8/16 to begin a new leg higher.  5 sessions later, we booked a 10.2% profit (Wednesday).

Why I Use TC2000

Another is FWLT, which is an open position which we’ve already booked partial profits in.  A move up through $20.25 was our trigger price on Monday, and earlier today (just 3 days later) the stock hit Target 1 for a quick 4.9% profit, allowing us to lighten and tighten.

Why I Use TC2000

And yes, we take losses too!  However, we keep them small and admit defeat quickly when the market proves we’re wrong.  That’s the key to surviving as a trader.

Grabbing the quicker day trade types of moves also gives us added market exposure while we’re waiting for the swing trades to develop. The profits from these trades are the gravy. Some last only minutes, but they can add considerably to the bottom line. These candidates are also based on the daily charts, but we just look to grab the initial moves in them of 2-4% typically.

Trading multiple timeframes is a nice way to diversify with your trading, especially right now when the market keeps edging higher. If you know how to catch the initial move when a stock breaks out, you can build up some quick profits while your other trades work on a different timeframe.

There’s nothing better than having your money working for you in the short-term AND in the intermediate-term as a trader! Always seek to uncover more opportunities on multiple timeframes, they’re out there right now.  Or pay us to find them for you.

Jeff White
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